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On Wednesday, KeyBanc Capital Markets provided insights on the single-family rental (SFR) market, focusing on American Homes 4 Rent (NYSE:AMH) and Invitation Homes Inc . (NYSE:INVH). Their proprietary analysis of asking rental rates indicates a continued acceleration in growth year-to-date (YTD) for both companies. INVH’s asking rates climbed by 5% YTD, while AMH saw a 2.8% increase through mid-March. AMH, with its $13.4 billion market capitalization and impressive 6.5% revenue growth over the last twelve months, has maintained dividend payments for 13 consecutive years. According to InvestingPro analysis, the company currently appears overvalued relative to its Fair Value.
The analyst notes that these YTD increases are promising and have outpaced last year’s improvements. However, they suggest that sustained momentum into the peak leasing season is crucial for driving revenue growth beyond AMH’s and INVH’s 2025 same-store revenue growth guidance. The rise in asking rates has been concurrent with moderating home inventory levels, which could gain significance as lease expirations rise in the spring and summer. AMH’s solid financial position is evidenced by its healthy current ratio of 2.15 and strong gross profit margin of 55.6%. InvestingPro subscribers can access 7 additional key insights and a comprehensive Pro Research Report that provides deep-dive analysis of AMH’s financial health and growth prospects.
Despite these positive trends, KeyBanc cautions that it is premature to predict an upside to the companies’ same-store revenue growth outlook due to various micro and macroeconomic challenges. Consequently, KeyBanc is reiterating its Overweight (OW) rating on INVH stock and Sector Weight (SW) rating on AMH stock, while also updating their estimates for both entities. AMH’s analyst consensus price targets range from $37 to $44, with the next earnings report expected on May 1, 2025. Discover more detailed valuation metrics and analyst forecasts with a InvestingPro subscription.
KeyBanc’s proprietary SFR data, which tracks home listings and asking rental rates across both companies’ portfolios on a weekly basis, shows that AMH’s year-over-year (y/y) growth has re-accelerated to the low-2% range after a previous dip. INVH’s y/y growth has continued to re-accelerate into the low-1% range after experiencing negative growth in the second half of 2024.
On a month-to-month (m/m) basis through mid-March 2025, AMH and INVH have seen increases in portfolio asking rent by 1.5% and 1.2%, respectively. This marks a significant acceleration for AMH compared to February, while INVH’s pace of improvement has decelerated during the same period. These findings underscore the dynamic nature of the SFR market and the importance of monitoring these trends for potential impacts on revenue projections.
In other recent news, American Homes 4 Rent reported its fourth-quarter 2024 earnings, with an earnings per share (EPS) of $0.33, surpassing the forecasted $0.16. However, the company’s revenue slightly missed expectations, coming in at $436.6 million compared to the projected $441.81 million. The company’s core Funds From Operations (FFO) per share grew by 6.6% in the fourth quarter, with a full-year net income of $398.5 million. JMP Securities upgraded American Homes 4 Rent’s stock rating from Market Perform to Market Outperform, setting a new price target of $41.00, citing the company’s increase in Net Operating Income (NOI) as a key factor. Meanwhile, Goldman Sachs adjusted its price target for the company to $42.00 from the previous $44.00, maintaining a Buy rating. This adjustment was influenced by the company’s fourth-quarter results and its guidance for 2025, which included a moderate outlook for rent growth. Additionally, American Homes 4 Rent provided guidance for 2025, expecting core FFO per share to be between $1.80 and $1.86, with plans to deliver approximately 2,300 homes. The company’s occupancy rate increased to 95.6% in January, with new lease rates rising by 0.7% during the same month.
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