Bank of America upgraded Veris Residential (VRE, Financials), citing that the market is underestimating the multi-family residential real estate investment trust's growth prospects; the multinational financial services company also upped its estimate on VRE.
The bank upgraded Veris to “Buy” from “Neutral” and raised its price target to $23 from $20; VRE stock is up 1% in pre-market trading on Tuesday, changing hands for $18.26.
The company reported $0.17 per share third-quarter FFO and quarterly revenue of $75.84 million, up 4% year-over-year; both figures beat analyst estimates.
Bank of America analyst Joshua Dennerlein raised Veris's 2025 and 2026 FFO forecasts to $0.65 and $0.71, respectively, after reviewing its third-quarter earnings. The VRE numbers are ahead of 2025 and 2026 FFO consensus estimates.
Bank of America said Veris prioritizes capital allocation, platform and portfolio optimization, and balance sheet management. Capital recycling may reduce leverage, which the bank considers unique among residential REITs, boosting value.
"We believe all can generate upside relative to our base line but expect the biggest benefit from accretive capital recycling opportunities that can lower leverage. We note that this is unique within Residential REITs at the moment," Dennerlein said.
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