UPDATE: Wunderlich Securities Downgrades Education Realty Trust On Valuation After Solid Run

In a report published Wednesday, Wunderlich Securities analyst Craig Kucera downgraded the rating on Education Realty Trust, Inc. (NYSE: EDR) from Buy to Hold, but raised the price target from $37.50 to $40.00.

In the report, Wunderlich Securities noted, “We are downgrading Education Realty (EDR) to Hold after a substantial share price run over the past several months and are reducing our 2015 estimates due to higher interest expense and G&A expectations to account for EDR's unsecured notes issuances in 4Q14 and expanding portfolio. We continue to see EDR as maintaining a sustainable competitive advantage in developing on-campus housing via the ONE Plan and in creating additional shareholder value in the student housing space in an environment that is becoming more attractive given a drop in expected supply growth and substantial pent-up demand; however, we believe the shares are nearing full valuation. Our split-adjusted target of $37.50 is increasing to $40 and represents 107% of our $37.40 (5.75% cap rate) NAV and 22.3x 2015E AFFO.”

Education Realty Trust closed on Tuesday at $38.40.