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Here's Why You Should Hold AvalonBay (AVB) Stock Right Now
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Residential REIT AvalonBay Communities Inc. (AVB - Free Report) has high-quality assets located in some of the premium markets of the country, which enable the company to generate steady rental revenues. The company’s properties generally command the highest rents in its markets.
The REIT is also leveraging technology, scale and organizational capabilities to drive innovation and margin expansion in its portfolio. This has become all the more essential in this social-distancing era, as the virus outbreak needed a quick shift to virtual operations for the continuity of normal business operations.
AvalonBay’s second-quarter results reflected uncollectible lease revenues from residential and retail properties as well as decline in economic occupancy. However, the company noted that through Jul 28, 2020, collected residential revenues improved to 97.7% for April compared with the 93.9% at month end, 96.4% for May compared with the 92.8% at month end, and 95.5% for June compared with the 93.6% at month end. Moreover, collected residential revenues for July totaled 93.3% as of Jul 28, 2020.
Nonetheless, the coronavirus pandemic has given rise to macroeconomic uncertainty and a dismal job-market environment, resulting in household contraction and consolidation. Apart from these, a number of factors are affecting rental demand, including the pandemic and work-from-home flexibility, that is resulting in a shift of some renter demand away from higher cost and urban/infill markets.
In addition, record-low mortgage rates and the desire for space are spurring homes sales. Moreover, there is a decline in demand from two categories of renters — corporate and students — since most temporary corporate assignments have been canceled, while higher education institutions are adopting remote-learning models and limiting on-campus activities for this fall. Thus, there is a reduced demand in many urban sub-markets.
Also, rent-paying capabilities of tenants have been affected amid this situation. Given the magnitude of the downturn as well as eviction moratorium in many of its markets, higher-than-normal bad debt is likely to prevail in the near term. Furthermore, amid a slowdown in demand, concession activity is likely to be high.
Nevertheless, the recent estimate revision for current-year funds from operations (FFO) per share indicates a favorable trend, with the Zacks Consensus Estimate marginally moving up to $9.03 over the past week.
Stocks to Consider
Duke Realty Corporation’s Zacks Consensus Estimate for 2020 FFO per share has been revised 3.5% upward to $1.49 over the past month. The company currently carries a Zacks Rank #2 (Buy).
Cousins Properties Incorporated’s (CUZ - Free Report) FFO per share estimate for the ongoing year has moved 1.1% north to $2.77 over the past month. The company currently carries a Zacks Rank of 2.
Four Corners Property Trust, Inc.’s (FCPT - Free Report) FFO per share estimate for 2020 has moved up 9.2% to $1.43 over the past month. It currently carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Here's Why You Should Hold AvalonBay (AVB) Stock Right Now
Residential REIT AvalonBay Communities Inc. (AVB - Free Report) has high-quality assets located in some of the premium markets of the country, which enable the company to generate steady rental revenues. The company’s properties generally command the highest rents in its markets.
The REIT is also leveraging technology, scale and organizational capabilities to drive innovation and margin expansion in its portfolio. This has become all the more essential in this social-distancing era, as the virus outbreak needed a quick shift to virtual operations for the continuity of normal business operations.
AvalonBay’s second-quarter results reflected uncollectible lease revenues from residential and retail properties as well as decline in economic occupancy. However, the company noted that through Jul 28, 2020, collected residential revenues improved to 97.7% for April compared with the 93.9% at month end, 96.4% for May compared with the 92.8% at month end, and 95.5% for June compared with the 93.6% at month end. Moreover, collected residential revenues for July totaled 93.3% as of Jul 28, 2020.
Nonetheless, the coronavirus pandemic has given rise to macroeconomic uncertainty and a dismal job-market environment, resulting in household contraction and consolidation. Apart from these, a number of factors are affecting rental demand, including the pandemic and work-from-home flexibility, that is resulting in a shift of some renter demand away from higher cost and urban/infill markets.
In addition, record-low mortgage rates and the desire for space are spurring homes sales. Moreover, there is a decline in demand from two categories of renters — corporate and students — since most temporary corporate assignments have been canceled, while higher education institutions are adopting remote-learning models and limiting on-campus activities for this fall. Thus, there is a reduced demand in many urban sub-markets.
Also, rent-paying capabilities of tenants have been affected amid this situation. Given the magnitude of the downturn as well as eviction moratorium in many of its markets, higher-than-normal bad debt is likely to prevail in the near term. Furthermore, amid a slowdown in demand, concession activity is likely to be high.
Shares of this Zacks Rank #3 (Hold) company have lost 3.3% over the past three months, wider than its industry’s decline of 2.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Nevertheless, the recent estimate revision for current-year funds from operations (FFO) per share indicates a favorable trend, with the Zacks Consensus Estimate marginally moving up to $9.03 over the past week.
Stocks to Consider
Duke Realty Corporation’s Zacks Consensus Estimate for 2020 FFO per share has been revised 3.5% upward to $1.49 over the past month. The company currently carries a Zacks Rank #2 (Buy).
Cousins Properties Incorporated’s (CUZ - Free Report) FFO per share estimate for the ongoing year has moved 1.1% north to $2.77 over the past month. The company currently carries a Zacks Rank of 2.
Four Corners Property Trust, Inc.’s (FCPT - Free Report) FFO per share estimate for 2020 has moved up 9.2% to $1.43 over the past month. It currently carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>