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Investing.com - Truist Securities lowered its price target on NexPoint Residential Trust (NYSE:NXRT) stock to $34.00 from $38.00 on Tuesday, while maintaining a Hold rating on the shares. The stock currently trades near its 52-week low of $29.98, with a dividend yield of 6.63%.
The firm cited expiring interest rate swaps paired with high financial leverage as key factors preventing the apartment REIT from growing earnings or cash flow this year or next. InvestingPro data shows a concerning debt-to-equity ratio of 4.22, though the company maintains a healthy current ratio of 2.78.
NexPoint Residential Trust has been the worst-performing apartment REIT in Truist’s coverage universe year-to-date, declining 26% compared to the flat performance of the Vanguard Real Estate ETF (VNQ). InvestingPro analysis reveals additional insights about NXRT’s performance and valuation metrics, with 8 more exclusive ProTips available for subscribers.
Truist expressed concern about slowing job growth as a broader risk across the sector but indicated a preference for other stocks in the group with steadier portfolio performance.
The firm specifically noted that other REITs do not face the same interest expense headwinds that are currently challenging NexPoint.
In other recent news, Nexpoint Residential Trust reported its second-quarter financial results, revealing a net loss of $7 million, or $0.28 per diluted share. This performance exceeded analyst expectations, which had projected a loss of $0.33 per share. However, the company’s revenue slightly missed forecasts, coming in at $63.1 million. Despite the earnings beat, the stock experienced a modest pre-market decline, reflecting broader market fluctuations. These developments highlight the company’s recent financial activities and investor reactions.
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