On Tuesday, JPMorgan (NYSE:JPM) made adjustments to its stance on Veris Residential (NYSE:VRE) stock, shifting the rating from Underweight to Neutral and increasing the price target to $17.00, up from the previous $14.00. The move reflects a more favorable view of the company's recent efforts to streamline its operations and focus on becoming a pure-play multifamily Real Estate Investment Trust (REIT).
The analyst noted appreciation for the steps Veris Residential has taken to simplify its narrative in the market. The company's transformation into a dedicated multifamily REIT is seen as a positive change, suggesting a clearer investment proposition for market participants.
Veris Residential's pricing power in the multifamily space was highlighted as a significant strength. With a rent-to-income ratio at 12%, which is the lowest among its peers, the company appears well-positioned to leverage this advantage, especially as it serves the competitive New York City metropolitan area.
Additionally, the analyst suggested that Veris Residential could be an attractive acquisition target. The estimated net asset value (NAV) per share for the company stands at $22.28, implying a potential upside from the current price target. This assessment contributes to the rationale behind the upgraded rating and higher price target.
The report concluded by addressing the potential for increased event expectancy for Veris Residential as liquidity returns to the multifamily market. This aspect further supports the decision to upgrade the company's stock rating to Neutral from Underweight.
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