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Independence Realty Trust (NYSE:IRT) shares perked up 2% in Monday premarket trading after JMP upgraded the multifamily residential REIT to Market Outperform from Market Perform, citing a “superior entry point” with the stock off 28.7% from a year ago.
Also, IRT traded at a 20% net asset value discount versus the residential peer group, analyst Aaron Hecht wrote in a note. That’s a notably steeper discount than what IRT has historically changed hands at.
Hecht sees IRT trading at a relative premium to the group over the next year, due to the company’s “superior geographic exposure and value-add opportunity.”
Despite an increasingly uncertain economic outlook, “we see no real signs of stress in our markets, as we achieved double-digit NOI growth during the first quarter in key markets such as Raleigh-Durham, Tampa, Charlotte, Myrtle Beach, Denver and Charleston among others,” IRT Chief Executive Scott Schaeffer said during its Q1 earnings call.
And the company’s first-quarter results “only strengthened our belief that demand drivers for residential real estate across the Sunbelt will result in outperformance, especially at IRT’s affordable price point,” the note said.
The Market Outperform rating diverges from the Quant system rating of Hold and aligns with the average Wall Street analyst rating of Buy.