MLV Reaffirms Buy On American Campus Following 3Q14 Results

In a research note issued today, MLV analyst Ryan Meliker reaffirmed a Buy rating on American Campus Communities (NYSE:ACC) with a $46 price target, following the company’s release of its third-quarter results. ACC’s same-store wholly-owned revenue growth increased by 4.9% and same-store NOI was up 5.6%.

Meliker wrote, “ACC reported a solid 3Q14 which featured strong same-store revenue and NOI growth flowing through to a beat vs. consensus on FFOM. While elevated same-store expense due to higher payrolls in the quarter might be slightly disappointing to some, we believe the focus of this print will be more heavily geared towards the upcoming forecasts for the 2015/16 school year. Management is targeting 2.8% rental rate growth for the next leasing cycle, which we believe is quite strong. However, ACC was slightly more conservative in the flow-through of this rental rate acceleration to NOI growth, forecasting at least 3% NOI growth (vs. our +4.9% estimate). While we believe the company is merely keeping expectations in check, we also think color on the call will be critical in gaining a better understanding of next year’s picture. Ultimately, given the strength in this quarter’s NOI growth and the beat compared to consensus, we believe ACC has done enough on this print to outperform the broader REIT index tomorrow, assuming that 2015 NOI outlook is conservative for no particular reason, and there is no underlying issue driving it.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ryan Meliker has a total average return of 11.4% and a 76.2% success rate. Meliker has a -1.5% average return when recommending ACC, and is ranked #583 out of 3354 analysts.

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