MLV Reaffirms Buy On Educational Realty Following 3Q14 Results

In a research note released today, MLV analyst Ryan Meliker reaffirmed a Buy rating on Education Realty Trust (NYSE:EDR) with a $14 price target, following the company’s release of its third-quarter results.

Meliker wrote, “EDR reported 3Q FFO of $0.11, coming in a penny behind MLV of $0.12 but in- line with consensus estimates of $0.11. The slight miss vs. our estimates looks to be driven by greater same-store operating expense, which was up 2.9% in the quarter compared to our estimate of +1.5% growth. Same-store revenue growth of 3.5% was above our 3.1% forecast, leading to NOI growth of 4.4% in the quarter, coming in under our forecast of a 5.3% increase, but in-line with most Street expectations. EDR continues to recycle assets in the portfolio, delivering all of the fall 2014 developments on time and on budget, while prudently disposing of non- core assets to fund its external growth aspirations. EDR completed one disposition of 1,002 beds for $31M in October.”

The analyst continued, “EDR reported a solid 3Q, which featured in-line FFO based upon solid quarterly fundamentals. Given the strength in final 2014/15 leasing results, we believe the results surrounding the current quarter were well understood and fell within consensus expectations. We reiterate that our recent upgrade on EDR from HOLD to BUY was not a call on earnings, but rather, stronger near-term internal growth, a smaller base for which external growth can have a more meaningful impact, comparable portfolio quality to ACC, and a valuation discount that is unwarranted at present. While we believe these results are in-line, any color on the call surrounding the ability to drive NOI growth above ACC’s “at least 3%” level will be encouraging for the stock.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ryan Meliker has a total average return of 12.5% and a 73.9% success rate. Meliker is ranked #575 out of 3364 analysts.

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