The Globe and Mail reports in its Thursday edition that Raymond James analyst Brad Sturges has boosted his recommendation for InterRent REIT to "strong buy" from "outperform." The Globe's David Leeder writes in the Eye On Equities column that Mr. Sturge continues to target the units at $15.75. Analysts on average target the units at $14.85. Mr. Sturges says InterRent's valuation "fails to capture its strong 2023 organic growth prospects." Mr. Sturges says in a note: "We are upgrading InterRent REIT to reflect: 1) strong and improving Canadian multifamily rental (MFR) fundamentals that can support InterRent's above-average 2023 organic growth prospects; 2) InterRent's historical track record of generating above-average SP-NOI [same property net operating income] and AFFO [adjusted funds from operations] per unit growth year-over-year; 3) its attractive relative valuation discount to its NAV estimate and to its historical average P/AFFO multiple; and 4) the potential for InterRent to be a privatization / M&A candidate given the high-quality nature and intensification/development opportunity inherent within its Canadian MFR real estate portfolio. ... We believe InterRent's premium valuation is warranted."
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