UPDATE: MLV & Co. Downgrades AmREIT

MLV & Co. downgraded AmREIT Inc (NYSE: AMRE) from Buy to Hold in a report issued Wednesday with a $25 price target.

Analysts Paul Morgan and Joe Ng noted that with "shares of AMRE up 50 percent since March and recent reports of a potential sale nearing (in the $25-26 range vs. our $25 PT), we are stepping aside and rotating into [American Assets Trust, Inc.]"

In the combined call on AMRE and AAT, Morgan commented that "an AMRE take out at$25-26 would support a higher valuation for AAT. Currently, AAT and AMRE trade at the same 2015 FFO multiple (21x) and the implied cap rate (5.6 percent)."

The report concluded that "Our $25 price target reflects an equally weighted average of (1) our going concern valuation...which applies a 10 percent discount to forward NAV of $26.15 (approximately), yielding a $24 value; and (2) a base case takeout valuation of $26 (up from $25), reflecting rolling forward our 12-month ahead NAV per share estimate by one period. Our $26 value represents an implied cap rate of 5.3 percent on NTM net operating income as of 4Q14."

AmREIT Inc closed at $23.94 on Tuesday.