A recently released estimate of second quarter REIT earnings from Robert W. Baird & Co. shows a continued bullish outlook for the second quarter, with AvalonBay at the fore.

But one thing that has changed is the projections for Associated Estates. Baird has downgraded the REIT to Neutral/Average Risk due to its smaller size and exposure to slower growth markets. The other changes in estimates and price targets came for Camden Properties, Essex Properties, Home Properties, Mid-America Apartment Communities, and UDR, which maintained their Outperform/ Average Risk estimates, but all saw price targets increase.

AvalonBay, Baird’s top pick, maintained the same price target of earlier forecasts, but was reaffirmed as a favorite for the quarter. Baird attributes a solid track record, experienced management, a peer-leading development pipeline, and a conservative balance sheet positioned for growth as the criteria that led to the favorable outlook.

As for the rest of the REITs, which begin announcing Q2 earnings results next week, guidance is what to look out for on the earnings reports, says Baird. “We expect to see continued strength in the apartment fundamentals, but we think all focus will be squarely on trend commentary and guidance raises, or perhaps more importantly, any lack thereof,” said the report.

Check back with Multifamily Executive in the coming weeks for the latest news from the upcoming earnings reports.