Oppenheimer bullish on Invitation Homes Inc. due to ‘attractive’ 2024 story

Oppenheimer analysts upgraded shares of Invitation Homes (NYSE:) to Outperform from Perform, with a new price target of $35 per share in a note to clients on Monday.

The analysts told investors that the company’s “attractive” 2024 story is coming into focus at a near-trough valuation.

“Rent growth and occupancy should be above pre-pandemic averages next year, in our view,” the analysts said. “Higher mortgage rates have widened the gap between the cost to rent and own a home ($1,100 cheaper to rent in INVH markets). Limited inventory also makes finding a home to purchase difficult. These factors are tailwinds for INVH and contributing to increased demand.”

“Several headwinds for OPEX are also expected to moderate. These factors should drive an acceleration in same-store NOI growth in 2024. INVH is unique in the REIT space given it has multiple avenues for external growth and ample liquidity,” they added.

The analysts also noted that the SFR industry also benefits from “several thematic tailwinds.”

“We see several big-picture themes making the SFR industry attractive, including positive demographics, an undersupply of housing, and low institutional ownership of SFR homes,” they explained. “These provide a constructive backdrop for the sector.”