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AvalonBay Communities Inc AVB

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

AvalonBay Communities Reports Q3 Results that Beat Guidance, Leading to Strong Q4 Guidance

Kevin Brown, CFA Equity Analyst

Analyst Note

| Kevin Brown, CFA |

Third-quarter results for AvalonBay Communities were slightly ahead of our expectations, though we didn't see anything in the quarter that would materially change our $205 fair value estimate for the no-moat company. Same-store occupancy remained flat at 96.2% in the third quarter, in line with our expectations. Same-store rental rates fell 2.2% year-over-year, though that was slightly better than our estimate of a 5.1% decline. Same-store revenue increased only 1.0% while same-store expenses increased 3.5%, leading to same-store net operating income falling 0.3%, though that was better than the 2.5% drop we had expected. While flat same-store NOI led to AvalonBay reporting core funds from operations of $2.06 in the third quarter that was in line with the figure reported in the third quarter of 2020, the higher-than-anticipated same-store revenue growth led to core FFO being 8 cents above our estimate and 10 cents above management's own third-quarter guidance provided back in July.

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Company Profile

Business Description

AvalonBay Communities owns a portfolio of 275 apartment communities with over 75,000 units and is developing 18 additional properties with over 5,000 units. The company focuses on owning large, high-quality properties in major metropolitan areas of New England, New York/New Jersey, Washington D.C., California, and the Pacific Northwest.

Contact
4040 Wilson Boulevard, Suite 1000
Arlington, VA, 22203
T +1 703 329-6300
Sector Real Estate
Industry REIT - Residential
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 3,090

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