We are changing our long-term recommendation for AvalonBay Communities (AVB) to Outperform from Neutral, as there is a positive directional movement for earnings estimate as analysts remain upbeat on the stock.
AvalonBay is one of the leading multi-family REITs, focusing primarily on the high barrier-to-entry regions of the U.S, where there are limited new apartment construction activities. In addition, the company has a strong balance sheet with adequate liquidity and limited debt maturities.
Consequently, AvalonBay is better placed than most of its peers to withstand the economic downturn. Our target price of $116.00 at 29.4X 2010 FFO/Share factors in this view.Zacks Investment Research
