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On Wednesday, Keefe, Bruyette & Woods analyst Jade Rahmani increased the price target on Invitation Homes (NYSE: INVH) stock to $36 from the previous target of $35, while maintaining a Market Perform rating on the company’s shares.
The adjustment followed Invitation Homes’ fourth-quarter earnings, which showed a year-over-year same-store net operating income (NOI) increase of 4.7%, slightly below Keefe, Bruyette & Woods’ projection of 4.8%. The company experienced a deceleration in rent growth to 2.3% from the third quarter’s 3.6%, and reported an occupancy rate of 96.7%, marginally lower than the 96.9% anticipated by the firm.
Despite the modest adjustments in rent growth and occupancy predictions, Rahmani noted some positive trends in the first two months of the quarter. Invitation Homes reported improving trends in January and February, with blended lease growth increasing to 3.6% from the previous quarter’s 2.3%, new lease growth improving to a decline of 0.8% from a decline of 2.2%, renewal growth climbing to 5.5% from 4.2%, and occupancy rising to 97.1% from 96.7%.
The analyst pointed out that the stock is currently trading at 20.5 to 21.3 times the adjusted funds from operations (AFFO) and at an economic capitalization rate of 5.9% to 6.1% based on their estimates for 2025-2026. Despite the uptick in certain performance metrics, the firm’s stance on the stock’s valuation remains unchanged at Market Perform.
Rahmani concluded by stating the rationale behind the revised price target, saying, "Adjusting target price." This reflects the slight changes in the firm’s projections for rent growth and occupancy rates in the coming years.
In other recent news, Invitation Homes Inc (NYSE:INVH). reported its fourth-quarter 2024 earnings, which exceeded analyst expectations. The company achieved an earnings per share (EPS) of $0.23, surpassing the projected $0.18, and reported revenue of $659 million, beating the anticipated $650.49 million. This marks a 5.6% increase in revenue year-over-year. Additionally, the company’s liquidity remains strong with nearly $1.4 billion available. Looking forward, Invitation Homes provided guidance for 2025, anticipating Core Funds From Operations (FFO) per share between $1.88 and $1.94, and Adjusted Funds From Operations (AFFO) per share between $1.58 and $1.64. The company plans to make $600 million in wholly owned acquisitions despite potential challenges in supply dynamics. Meanwhile, analysts have shown interest in Invitation Homes’ strategic partnerships and market expansion plans as the company navigates anticipated supply constraints.
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