Scotiabank downgraded MAA to Underperform, citing overbuilding and prolonged supply pressure in Sunbelt markets.
Scotiabank lowered its price target for Mid-America Apartment Communities (MAA) to $120 from $138 and downgraded the stock to Underperform. The firm expects subpar rent growth in Sunbelt markets due to significant overbuilding, which may take years to absorb.
The downgrade follows first-quarter earnings reports, with Barclays previously raising its price target to $139 from $137. Barclays noted that earnings growth for apartment REITs may bottom in 2026, though stock valuations have already reflected this outlook.
MAA, a multifamily REIT, operates properties primarily in the Southeast, Southwest, and Mid-Atlantic regions. Supply pressures could keep occupancy below pre-COVID levels, limiting rent growth potential.