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Camden Property Trust (NYSE:CPT) rose after Bank of America double upgraded the multi-family residential REIT on an attractive valuation.
CPT was trading 1.69% higher Monday pre-market at $121.35.
“Valuation is hard to ignore despite fundamental risks,” BoA said in a research note, which implies CPT is at a significant discount considering its Sunbelt portfolio trade.
BoA believes market rent growth in the Sunbelt region will remain challenged in 2025. However, focusing on 2026, fundamentals look more balanced in the Sunbelt. Looking past near-term risks, CPT’s current valuation has a wide margin of safety, the note said.
The stock is trading ~20% above its 200-day simple moving average at $120.17. As of July end, short interest stood at 2.03% of the total float, representing 2.16M shares sold short.
Also, the REIT’s floating-rate debt offers additional earnings upside. A Federal Reserve rate cut is expected to be positive for the company’s earnings growth as 15.2% of its debt is floating rate, BoA said.
The investment bank and financial services holding company raised its recommendation on the stock to Buy from Underperform, and increased the price target to $147 from $111.
The earnings estimates are unchanged, the research note said.
The rating aligns with the average Wall Street analysts‘ rating of Buy, with a price target of $113.58. Seeking Alpha authors also rate the stock as Buy.
Meanwhile, SA’s Quant Rating system grades CPT as Hold, with a score of 3.31 on a scale of 5. Quant assigns the stock D for Valuation, B+ for Growth, B+ for Profitability, A- for Momentum and B+ for Revisions.