Raymond James In response to a “relatively better” start to 2023 compared to its U.S. multi-family residential REIT peers, Raymond James analyst Brad Sturges lowered his rating for BSR Real Estate Investment Trust to “outperform” from “strong buy” previously.
“BSR’s unit price has been relatively more stable in 2023 YTD (positive total return: 3 per cent), versus its larger market capitalization U.S. multifamily rental (MFR) REIT peers (average negative total return: 5 per cent),” he said.
Mr. Sturges kept a US$17 target for the Little Rock, Ark.-based company. The average is $18.38.
“Given its relatively more stable start in 2023 year-to-date, BSR now trades at a similar P/AFFO multiple valuation versus its larger-cap U.S. MFR peers on average,” he concluded. “However, we believe its below-average trading liquidity may somewhat limit its P/AFFO multiple recovery in the near-term in light of this relatively similar valuation to its larger market capitalization U.S. MFR REIT peers. We continue to forecast BSR’s 2023E SP-NOI [same-property net operating income] growth year-over-year to be in the mid-single-digit range year-over-year, in line with BSR’s and its U.S. MFR peers’ growth guidance for the year. Further, we are forecasting BSR to generate 2023 estimated FD AFFO/unit growth of 8 per cent year-over-year, which is also in-line with its U.S. MFR peer average.”