Analyst Jeffrey Spector of Bank of America Securities maintained a Sell rating on Sun Communities (SUI – Research Report), with a price target of $114.00.
Jeffrey Spector’s rating is based on a combination of factors that reflect both operational improvements and ongoing challenges for Sun Communities. Despite a positive performance in the fourth quarter with core funds from operations (FFO) slightly exceeding expectations, there are concerns about the company’s future growth prospects. The guidance for 2025 FFO suggests modest growth, but it falls short of consensus expectations, particularly due to the exclusion of contributions from the Marina business, which has been sold.
Furthermore, while the sale of the Marina business to Blackstone is expected to generate significant proceeds, there are uncertainties regarding the effective use of these funds, especially amidst an ongoing CEO search. The company’s decision to refocus on its core manufactured housing and recreational vehicle segments is seen as a strategic move, yet it raises questions about the long-term impact on growth and profitability. These factors, combined with a valuation that appears stretched relative to the price objective, contribute to the Sell rating.
According to TipRanks, Spector is a 4-star analyst with an average return of 6.1% and a 58.12% success rate. Spector covers the Real Estate sector, focusing on stocks such as Cousins Properties, Prologis, and Rexford Industrial Realty.