Shares of American Homes 4 Rent (NYSE: AMH) reached a new 52-week low during trading on Thursday, dropping to $30.94 before closing slightly higher at $30.96. The stock saw a significant volume of 2,121,895 shares traded, following a previous close of $31.55. This decline is attributed to recent downgrades from several Wall Street analysts, who have adjusted their price targets for the company.
Analysts have reacted to American Homes 4 Rent’s performance with mixed sentiments. On September 17, 2023, the Goldman Sachs Group lowered its rating from “buy” to “neutral,” revising the price target down from $43.00 to $37.00. Following suit, Evercore ISI adjusted its price target from $40.00 to $39.00, maintaining an “outperform” rating for the company. Similarly, Wells Fargo & Company reduced its target from $38.00 to $37.00 while keeping an “overweight” rating. Barclays and Keefe, Bruyette & Woods also made downward adjustments, setting price targets at $34.00 and $37.00 respectively.
Amid these changes, eight analysts currently rate American Homes 4 Rent with a “buy” designation, while seven provide a “hold” rating. According to MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus price target of $38.14.
Financial Performance and Dividend Update
American Homes 4 Rent recently reported its quarterly earnings on October 29, 2023. The real estate investment trust (REIT) achieved earnings per share (EPS) of $0.47, surpassing analysts’ expectations of $0.46. The company reported revenue of $478.46 million, exceeding the anticipated $475.75 million. This marked a year-over-year revenue increase of 7.5%, with a net margin of 24.70% and a return on equity of 5.90%.
In addition to its financial performance, American Homes 4 Rent announced a quarterly dividend of $0.30, scheduled for payment on December 31, 2023. Investors of record on December 15, 2023, will be eligible for this distribution, representing an annualized dividend of $1.20 and a yield of 3.9%. Notably, the company’s dividend payout ratio stands at 101.69%.
Insider Transactions and Hedge Fund Activity
Recent insider activity also highlights investor confidence in the company. Director Douglas N. Benham purchased 1,000 shares at an average price of $31.65 each on November 19, 2023, increasing his total holdings to 7,991 shares, valued at approximately $252,915.15.
Institutional investors have shown significant interest in American Homes 4 Rent as well. The Vanguard Group Inc. increased its stake by 0.6% in the third quarter, now holding 44,715,728 shares valued at $1.49 billion. Norges Bank also acquired new shares during the second quarter, valued at about $796.71 million. Other notable transactions include State Street Corp, which lifted its holdings by 2.2%, and JPMorgan Chase & Co., which boosted its stake by 15.2%.
These developments reflect a complex landscape for American Homes 4 Rent as it navigates market fluctuations and investor sentiment. Founded in 2012 and headquartered in Las Vegas, NV, the company specializes in acquiring, renovating, leasing, and managing single-family homes as rental properties. As it moves forward, stakeholders will be keenly watching how these shifts influence the company’s trajectory in the competitive real estate market.
