Bluerock Residential Growth Initiated with a Buy at Boenning & Scattergood

By Austin Angelo

Boenning & Scattergood analyst Merrill Ross initiated coverage with a Buy rating on Bluerock Residential Growth (NYSE: BRG) today and set a price target of $11. The company’s shares closed yesterday at $8.95.

Ross noted:

“We think the market has overly discounted the potential for balance sheet expansion and same store sales growth at Bluerock Residential Growth REIT (BRG). The board of directors cut the common dividend by a whopping 44% in 2017 because of the internalization of management, which led to significantly higher G&A expense in lieu of a base management fee of 1.5% of equity. Market participants punished the stock, which now trades at a ~34% discount to NAV, compared to small cap multifamily REIT peers trading at an ~10% discount to NAV. We think that BRG will be able to grow into its admittedly swollen expense base over the next few years to the extent that it is able to source off-market transactions at attractive discounts compared to fully marketed deals, and to the extent that it can continue to fund its growth through the issuance of redeemable preferred stock.”

According to TipRanks.com, Ross is a 1-star analyst with an average return of -1.0% and a 50.0% success rate. Ross covers the Financial sector, focusing on stocks such as Gladstone Commercial Corp, Monmouth Real Estate ate, and City Office REIT.

Currently, the analyst consensus on Bluerock Residential Growth is a Moderate Buy with an average price target of $11.

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Based on Bluerock Residential Growth’s latest earnings release for the quarter ending March 31, the company reported a quarterly GAAP net loss of $237K. In comparison, last year the company had a net profit of $24.6 million.

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Bluerock Residential Growth REIT, Inc. operates as a real estate investment trust. It engages in acquiring apartment properties. The company was founded on July 25, 2008 and is headquartered in New York, NY.