Invitation Homes Inc. (INVH), headquartered in Dallas, Texas, is the largest single-family rental player with a portfolio of more than 80,000 units. Valued at $21.71 billion by market cap, the company owns, renovates, leases, and operates single-family homes as residential properties, including single-family homes in planned unit developments. Its services include property management, home selection, maintenance programs, and online payment.
Shares of this leading rental provider have underperformed the broader market considerably over the past year. INVH has gained 5.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.5%. But in 2024, the gap narrowed, with INVH stock rising 3.9%, while the SPX is up 11.2% on a YTD basis.
Narrowing the focus, INVH’s underperformance looks less pronounced when compared to the iShares Residential and Multisector Real Estate ETF (REZ). The exchange-traded fund has gained about 6.4% over the past year. Also, the stock has marginally outperformed the ETF’s 2.6% returns on a YTD basis.
INVH is well-positioned to benefit from rising house prices. On Apr. 1, the company reported its Q1 earnings with a 9.5% year-over-year increase in revenue to $646 million and a 5.7% rise in core FFO to 0.47. The stock rose marginally following its earnings release.
For the current fiscal year, ending in December, analysts expect INVH’s core FFO to grow 3.4% to $1.83 on a diluted basis. The company’s surprise history is impressive. It beat or matched the consensus FFO estimate in each of the last four quarters.
Among the 21 analysts covering INVH stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, three “Moderate Buys,” and nine “Holds.”
This configuration is slightly less bullish than three months ago, with 10 suggesting a “Strong Buy.”
Recently, Scotiabank analysts maintained a “Sector Perform” rating on INVH stock and lifted the price target from $36 to $38, implying a potential upside of 7.2% from the current levels.
The mean price target of $38.05 represents a 7.3% premium to INVH’s current price levels. The Street-high price target of $41 suggests an upside potential of 15.7%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
