Invitation Homes Earnings: Raised Credit Rating Should Make Acquisitions More Accretive to Earnings

Third-quarter results for no-moat Invitation Homes were relatively in line with our expectations, giving us confidence in our $41 fair value estimate. Same-store occupancy fell 60 basis points sequentially to 97.0% but was only down 10 basis points year over year. Average monthly rent increased 3.7% year over year, leading to same-store revenue growth of 3.6% that was slightly below our estimate of 4.2% growth. However, same-store operating expenses were only up 3.1%, better than our estimate of expenses growth 4.6%, so the company reported same-store net operating income growth of 3.9% that was in line with our 4.0% growth estimate for the third quarter. Invitation Homes reported core funds from operations of $0.47 per share for the third quarter, two cents better than our $0.45 estimate and three cents better than the $0.44 figure the company reported in the third quarter of 2023.