New Coverage Seeing “significant growth opportunities at its doorstep as a consolidator of the U.S. SFR [single family rental] home sector,” Raymond James analyst Brad Sturges initiated coverage of Tricon Residential Inc. with an “outperform” rating and US$18.50 target, above the US$16.84 average.
“The pandemic has accelerated pre-existing migration trends between U.S. states, and accelerating job and population growth within the larger US Sunbelt metropolitan statistical areas (MSAs),” he said. “The steady flow of new residents into U.S. SunBelt MSAs is creating larger affordable housing shortages and providing a longer runway for growth in the SFR housing sector. Tricon suggests that its recent US initial public offering (IPO) may somewhat constrain its 2022 AFFO [adjusted funds from operations] per share growth. That said, Tricon is well capitalized to execute its near-term strategic growth plan. Further, Tricon’s U.S. SFR gain-to-lease AMR growth opportunity has expanded to 20 per cent in recent quarters, supporting solid future organic and AFFO/share growth prospects looking further out.”