Barclays Initiates Coverage of Sun Communities (SUI) with Overweight Rating

Sun Communities, Inc. (NYSE:SUI) efforts to streamline operations by selling a marina segment have caught Barclay’s attention. On May 28, the investment bank initiated coverage of the stock with an Overweight rating and a $141 price target. The bullish stance underscores confidence in the real estate investment trust prospects.

Barclays Initiates Sun Communities Coverage with Overweight Rating

A wide angled view of a large office building owned by the REIT-Mortgage company, highlighting their commercial real estate investments.

Barclays noted that Sun Communities has streamlined operations by selling its marina segment, a deal completed on April 30, generating $5.25 billion. The sale excluded $250 million in Safe Harbor subsidiaries, which are set to close in Q2 2025. In addition, the transaction stands out given its swift return on netting Sun Communities $1.4 billion gain in over four years.

Barclays expects Sun Communities to utilize net proceeds from the sale of the marina segment to fuel future earnings growth. The sale of Safe Harbor Marinas is also expected to enhance financial flexibility and support future investments. Sun Communities has enhanced its focus on manufactured housing and recreational vehicle operations after the sale. The two operations are expected to account for 90% of the company’s annual net operating income. They should also provide the baseline for earnings growth.

The company boasts an impressive 33-year track record of rewarding investors with dividends. It has also raised dividends for nine straight years, with the stock yielding 3.1%, affirming commitment to shareholder value.

Sun Communities is a real estate investment trust (REIT) that owns, operates, and develops manufactured housing communities, RV parks, and marinas. It offers properties and amenities for various lifestyles, including all-age, 55+ communities, and active adult living.

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