CAPREIT Q2 revenue beats expectations

Overview

• CAPREIT Q2 operating revenue beats analyst expectations, per LSEG data

• Company focuses on strategic asset sales and acquisitions to improve portfolio

• Same property residential portfolio in canada occupancy rises to 98.3%, boosting average monthly rent

Outlook

• CAPREIT targets disposition of C$400 mln in non-core Canadian property sales in 2025

• Company aims to return to a pure-play Canadian apartment REIT

• CAPREIT expects to fund capital expenditures through FFO in near term

• Company plans further progress on objectives to boost cash flow generation

Result Drivers

• ASSET SALES - CAPREIT sold C$274 mln of non-core Canadian assets and C$743 mln in European dispositions, focusing on portfolio optimization

• RENT STRATEGIES - Rent optimization and vacancy mitigation led to increased occupancy and average monthly rent in Canadian portfolio

• COST CONTAINMENT - Proactive expense management contributed to a 40 basis point increase in same property NOI margin

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the residential reits peer group is "buy"

• Wall Street's median 12-month price target for Canadian Apartment Properties Real Estate Investment Trust is C$50.00, about 12.6% above its August 6 closing price of C$43.68

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 16 three months ago

Press Release: ID:nGNXbfRghs