Valued at a market cap of $17.9 billion, Invitation Homes Inc. (INVH) is the largest owner and operator of single-family rental homes in the United States. Organized as a residential REIT, the Dallas, Texas-based company acquires, renovates, leases, and manages high-quality homes in desirable neighborhoods across 16 major U.S. markets, with a strong presence in the Western U.S., Florida, Texas, and the Southeast.
Shares of this residential REIT found themselves on the wrong side of the market over the past year, declining 5.5%, while the broader S&P 500 Index ($SPX) has surged 16.9%. Although the stock has rebounded 6.8% on a year-to-date basis, it still lags the SPX's 8.7% return.
Narrowing the focus, INVH has also lagged behind the iShares Residential and Multisector Real Estate ETF (REZ), which gained 16% over the past 52 weeks.
On July 29, Invitation Homes reported second-quarter results, and its shares rose marginally. Its total revenues increased 9.7% year over year to $747.55 million, driven by resilient rental demand and portfolio growth. Core FFO per share rose 6.3% to $0.51, and AFFO per share increased 7.3% to $0.44.
For the current fiscal year, ending in December, analysts expect INVH’s AFFO to decline 1.1% year over year to $1.89. On the bright side, the company’s FFO surprise history is promising. It topped the consensus estimates in each of the last four quarters.
Among the 25 analysts covering the stock, the consensus rating is a "Moderate Buy,” which is based on 11 “Strong Buy,” one “Moderate Buy,” and 13 “Hold” ratings.
The configuration is slightly less bullish than two months ago, with 10 analysts suggesting a “Strong Buy” rating.
On July 3, Wells Fargo reaffirmed its "Buy" rating on Invitation Homes and maintained a $33 price target, signaling continued confidence in the residential REIT's long-term prospects.
The mean price target of $32.48 represents a 9.5% premium from INVH’s current price levels, while the Street-high price target of $36 suggests a 21.3% potential upside from the current levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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