Hold Rating Maintained Amidst Invitation Homes’ Mixed Financial Performance and Strategic Initiatives

BTIG analyst Michael Gorman has maintained their neutral stance on INVH stock, giving a Hold rating yesterday.

Michael Gorman has given his Hold rating due to a combination of factors influencing Invitation Homes’ performance and outlook. In the first quarter of 2024, the company’s core funds from operations (FFO) per share slightly beat consensus estimates and aligned with Gorman’s predictions, reflecting a balance of higher joint venture management revenue and lower general and administrative expenses, tempered by a modest shortfall in net operating income. While Invitation Homes maintained its full-year FFO per share guidance and core operational assumptions, same-store net operating income (SSNOI) growth was marginally below expectations, and expenses rose more than anticipated, particularly in Florida, raising concerns about cost control.
The company’s fundamental demand indicators, such as blended rent growth and occupancy rates, continue to be robust, driving a solid increase in same-store core revenue. However, the accelerated growth in operating expenses, especially in the high-revenue Florida region, weighs on the investment outlook. Additionally, the company’s joint venture initiatives and management service agreements signal a strategic growth approach, but this extension into joint ventures has yet to fully prove its long-term contribution to earnings. Given these mixed signals—strong revenue growth and occupancy, counterbalanced by rising expenses and the nascent stage of joint venture strategies—Gorman’s neutral, or Hold, stance reflects a cautious optimism, pending clearer signs of sustained earnings growth and expense management.

In another report released yesterday, BMO Capital also maintained a Hold rating on the stock with a $37.00 price target.

Based on the recent corporate insider activity of 34 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of INVH in relation to earlier this year.

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Invitation Homes (INVH) Company Description:

Invitation Homes, Inc. engages in the acquisition, renovation, leasing and operating single-family homes as rental properties, including single-family homes in planned unit developments. Its services include property management, selection of homes, maintenance program, and online payment. The company was founded by Marcus Ridgway, Dallas Tanner, and Brad Greiwe in 2012 and is headquartered in Dallas, TX.