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On Monday, Lucid (NASDAQ:LCID) Capital Markets adjusted its outlook on UMH Properties (NYSE:UMH), reducing the price target to $21 from the previous $22 while retaining a Buy rating on the stock. Currently trading at $17.78, UMH still has significant upside potential according to analyst consensus, with targets ranging from $19 to $25. InvestingPro data shows the company has maintained strong financial health, earning a "GOOD" overall rating. The revision followed UMH’s first-quarter performance in 2025, which fell short of Lucid Capital Markets’ Net Funds From Operations (NFFO) prediction by $0.01 per share.
The firm has adjusted its 2025 NFFO/AFFO (Adjusted Funds From Operations) estimates for UMH Properties from $1.01/$1.07 to $1.00/$1.06 and also revised the 2026 NFFO/AFFO projections from $1.09/$1.14 to $1.07/$1.13. Despite these adjustments, InvestingPro analysis reveals UMH has maintained dividend payments for 36 consecutive years and has raised its dividend for 4 consecutive years, with a current dividend yield of 5.06%. The changes reflect the latest financial results and expectations for the company’s future performance. Get access to 6 more exclusive InvestingPro Tips and comprehensive analysis through the Pro Research Report.
Despite the reduction in price target and earnings estimates, Lucid Capital Markets’ analyst believes that UMH Properties shares are currently available at a significant discount to their Net Asset Value (NAV). The analyst’s NAV estimate for UMH stands at $22.99 per share, and the new price target of $21 represents 91% of this estimated NAV. According to InvestingPro data, UMH has demonstrated solid revenue growth of 8.17% over the last twelve months, with a healthy gross profit margin of 54.89%. The analyst noted that UMH’s manufactured housing peers are trading at 96% of their NAV, while the residential sector overall is trading at 94%.
The report also highlights Lucid Capital Markets’ expectation that UMH will continue to achieve significant same-store Net Operating Income (NOI) growth. This anticipated growth is attributed to increased occupancy rates as rental units are deployed, which is projected to lead to an estimated 7% earnings growth for UMH in 2025.
The $21 price target is equivalent to 20 times the firm’s estimated 2025 AFFO for UMH Properties. This valuation compares to UMH’s manufactured housing peers, which are valued at 24 times AFFO, and the residential sector overall, valued at 22 times AFFO. The analysis suggests that UMH Properties is trading at a more favorable multiple relative to its industry counterparts.
In other recent news, UMH Properties announced its first-quarter 2025 financial results, which fell short of analyst expectations. The company reported earnings per share (EPS) of $0.00, missing the projected $0.036, while revenue reached $61.23 million, below the anticipated $62.88 million. Despite these shortfalls, UMH Properties experienced a 5% year-over-year increase in normalized funds from operations (FFO), reaching $0.23 per diluted share. Rental and related income grew by 8% to $54.6 million, driven by increased same-property income and community net operating income.
UMH Properties also introduced solar shingle homes and duplex manufactured homes to enhance growth, with rental home occupancy rising slightly to 94.6%. The company remains optimistic about its 2025 outlook, maintaining full-year normalized FFO guidance between $0.96 and $1.04 per share. Additionally, UMH Properties is exploring acquisition opportunities to expand its portfolio further. The company recently acquired two communities in Mantua, New Jersey, for $24.6 million, adding 266 sites to its portfolio.
Analysts from Alliance Global Partners (NYSE:GLP) and Janney have noted that UMH Properties is navigating competitive pressures and potential impacts from tariffs, with refinancing efforts underway at rates between 5.5% and 5.75%. The company continues to work on expanding its existing communities and increasing its rental home portfolio, with plans to add 800 new rental homes this year.
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