RBC Capital adjusted its valuation of American Homes 4 Rent (AMH) downward, cutting the stock's price target to $35 from $38 but preserving an Outperform rating. The firm attributed the move to disappointing operating trends, specifically weak occupancy levels that have limited the company's ability to push rents higher.
RBC noted that company management has described demand as "within normal ranges," but the analyst said that description masks a market that lacks the resilience needed to absorb substantial new supply. In that context, the firm judged demand dynamics insufficient to counteract the continuing heavy levels of inventory coming to market, which in turn constrains pricing power.
Despite these headwinds, RBC expressed approval of American Homes 4 Rent's decision to enlarge its share repurchase program. The analyst highlighted the company's historical discount to for-sale market values as a rationale for buybacks, pointing to a record gap exceeding 35%. A separate research tip previously noted management has been aggressive in repurchasing shares.
At the time of the analyst note, the stock was trading at $29.39, close to its 52-week low of $28.84. Independent analysis referenced by the report suggests the shares are essentially fairly valued at current levels. The company also offers a 4.47% dividend yield and is trading on a P/E multiple of 25.02.
Following the update, RBC reduced its financial estimates for the company by 2%.
Recent quarterly results provide additional context for the firm's outlook. American Homes 4 Rent reported fourth-quarter 2025 earnings per share of $0.33, materially above consensus expectations of $0.20 - a 65% earnings surprise. Revenue for the quarter was $454.99 million, slightly below the anticipated $458.45 million.
Other broker activity has echoed caution. Citizens revised its price target on the stock from $41 to $37 while maintaining a Market Outperform rating. Analyst Aaron Hecht cited regulatory concerns as part of the rationale for his adjustment, pointing to an executive order from President Trump and pending congressional legislation aimed at expanding American access to homeownership as factors that could influence the single-family rental market.
American Homes 4 Rent is a real estate investment trust focused on single-family rental homes. RBC's action takes place against a backdrop of weak occupancy, elevated supply, and strategic capital allocation choices by management, including an upsized repurchase program that the analyst views as value-accretive given the company's steep discount to comparable for-sale market values.
Investors evaluating AMH may weigh the near-term pressure on occupancy and pricing against the potential benefits of buybacks and a relatively high dividend yield. The firm’s modest reduction to estimates and preserved Outperform rating indicate that the analyst still sees upside, though tempered by the company’s current operating challenges.