Hold Rating for BRT Apartments Amid High Leverage and Declining Income

Analyst Barry Oxford of Colliers Securities reiterated a Hold rating on BRT Apartments (BRT – Research Report), with a price target of $20.00.

Barry Oxford has given his Hold rating due to a combination of factors impacting BRT Apartments. The company’s high leverage makes net acquisitions challenging, and its valuation appears fair with a multiple of 15.2x compared to the group’s 17.9x. Additionally, the company’s same-store net operating income decreased by 4.6% year-over-year, which is notably lower than its peers in the Southeast region.
Furthermore, BRT Apartments reported funds from operations earnings that fell short of both Barry’s and consensus estimates. The company has maintained stable occupancy rates but has not completed any acquisitions or dispositions recently, and future acquisitions are expected to be minimal. Despite having a reasonable liquidity position and no major debt maturities until the third quarter of 2025, the company’s high debt to enterprise value ratio remains a concern. The price target of $20.00 suggests a modest return, aligning with the neutral stance.