MAA
MAA
Accumulate 2026-03-28
Model
DDM
Price at Report
$120.57
Base IV
$169.36
Bear IV
$142.18
Bull IV
$208.12
Entry Zone: 149-156 · Sell Above: 177
Bore Family Office
Valuation Report — Mid-America Apartment Communities, Inc. (MAA) • March 28, 2026
3-Stage DDM (Ke) • Discount Rate: 8.00% • Current Price: $120.57
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Mid-America Apartment Communities (MAA) is one of the largest apartment REITs in the U.S., owning and operating approximately 102,000 apartment units concentrated in high-growth Sunbelt markets including Dallas-Fort Worth, Atlanta, Phoenix, Tampa, and Charlotte. MAA focuses on "large, secondary" markets that offer better job growth and affordability than coastal gateway cities while commanding above-average rent growth through cycles.
The Sunbelt apartment sector has faced elevated new supply deliveries since 2023 following a construction boom, temporarily pressuring occupancy and rent growth. MAA's same-store blended lease rate growth was -0.1% in FY2025 (new leases -5.8%, renewals +4.6%). As the supply delivery cycle peaks and new construction starts decline, management expects recovery in rental pricing power through 2026-2027 driven by demographics, affordability advantage over homeownership, and continued Sunbelt in-migration.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Same Store Portfolio | $1,950M | 88% | -0.1% | — | ~99K units; NOI growth -1.4% FY2025 due to new supply pressure |
| Non-Same Store / Development Lease-up | $259M | 12% | +8.0% | — | Newly acquired and development properties; 2,522 units under construction |
| Blended Growth Rate | — | 100% | +0.9% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 5.0% | <8% weak |
| FCF Margin | 14.1% | ≥10% strong |
| Debt / EBITDA | 4.3x | 2–5x moderate |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $1,778 | $2,020 | $2,148 | $2,191 | $2,209 |
| Rev YoY Growth | — | +13.6% | +6.3% | +2.0% | +0.8% |
| Gross Margin | 62.3% | 64.2% | 64.2% | 62.6% | 62.1% |
| EBITDA ($M) | $999 | $1,173 | $1,255 | $1,243 | $1,242 |
| EBITDA Margin | 56.2% | 58.1% | 58.4% | 56.7% | 56.2% |
| Operating Income ($M) | $465 | $629 | $689 | $657 | $619 |
| Operating Margin | 26.2% | 31.1% | 32.1% | 30.0% | 28.0% |
| Net Income ($M) | $534 | $637 | $553 | $528 | $447 |
| Net Margin | 30.0% | 31.5% | 25.7% | 24.1% | 20.2% |
| EPS (diluted) | $4.61 | $5.48 | $4.71 | $4.49 | $3.78 |
| Free Cash Flow ($M) | $338 | $319 | $374 | $161 | $312 |
| Annual DPS | $4.100 | $4.680 | $5.600 | $5.880 | $6.060 |
| Total Debt ($M) | $4,517 | $4,415 | $4,540 | $4,981 | $5,405 |
📈 DDM Scenarios
$142
🔴 Bear
$169
📊 Base
$208
🚀 Bull
$120.57
Current Price
$149
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 1.0% | 2.0% | 2.0% | 8.00% | $142 | ▲17.9% |
| 📊 Base | 3.0% | 3.0% | 2.5% | 8.00% | $169 | ▲40.5% |
| 🚀 Bull | 5.5% | 4.0% | 3.0% | 8.00% | $208 | ▲72.6% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 1.0% | Stage 2: 2.0% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $8.827 | $8.174 | $8.17 |
| Year 2 | Stage 1 | $8.916 | $7.644 | $15.82 |
| Year 3 | Stage 1 | $9.005 | $7.148 | $22.97 |
| Year 4 | Stage 1 | $9.095 | $6.685 | $29.65 |
| Year 5 | Stage 1 | $9.186 | $6.252 | $35.90 |
| Year 6 | Stage 2 | $9.370 | $5.904 | $41.81 |
| Year 7 | Stage 2 | $9.557 | $5.576 | $47.38 |
| Year 8 | Stage 2 | $9.748 | $5.267 | $52.65 |
| Year 9 | Stage 2 | $9.943 | $4.974 | $57.62 |
| Year 10 | Stage 2 | $10.142 | $4.698 | $62.32 |
| Terminal | — | TV=$172.41 | PV(TV)=$79.86 (56% of IV) | $142.18 |
| Intrinsic Value | — | — | PV(Divs) $62.32 + PV(TV) $79.86 | $142.18 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.00%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $172.41. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $79.86). Intrinsic value = PV of all dividends ($62.32) + PV of terminal value ($79.86) = $142.18 per share.
Base Scenario
Stage 1: 3.0% | Stage 2: 3.0% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $9.002 | $8.335 | $8.34 |
| Year 2 | Stage 1 | $9.272 | $7.949 | $16.28 |
| Year 3 | Stage 1 | $9.550 | $7.581 | $23.87 |
| Year 4 | Stage 1 | $9.837 | $7.230 | $31.10 |
| Year 5 | Stage 1 | $10.132 | $6.896 | $37.99 |
| Year 6 | Stage 2 | $10.436 | $6.576 | $44.57 |
| Year 7 | Stage 2 | $10.749 | $6.272 | $50.84 |
| Year 8 | Stage 2 | $11.072 | $5.982 | $56.82 |
| Year 9 | Stage 2 | $11.404 | $5.705 | $62.53 |
| Year 10 | Stage 2 | $11.746 | $5.441 | $67.97 |
| Terminal | — | TV=$218.90 | PV(TV)=$101.39 (60% of IV) | $169.36 |
| Intrinsic Value | — | — | PV(Divs) $67.97 + PV(TV) $101.39 | $169.36 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.00%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $218.90. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $101.39). Intrinsic value = PV of all dividends ($67.97) + PV of terminal value ($101.39) = $169.36 per share.
Bull Scenario
Stage 1: 5.5% | Stage 2: 4.0% | Terminal: 3.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $9.221 | $8.538 | $8.54 |
| Year 2 | Stage 1 | $9.728 | $8.340 | $16.88 |
| Year 3 | Stage 1 | $10.263 | $8.147 | $25.02 |
| Year 4 | Stage 1 | $10.827 | $7.958 | $32.98 |
| Year 5 | Stage 1 | $11.423 | $7.774 | $40.76 |
| Year 6 | Stage 2 | $11.880 | $7.486 | $48.24 |
| Year 7 | Stage 2 | $12.355 | $7.209 | $55.45 |
| Year 8 | Stage 2 | $12.849 | $6.942 | $62.39 |
| Year 9 | Stage 2 | $13.363 | $6.685 | $69.08 |
| Year 10 | Stage 2 | $13.898 | $6.437 | $75.52 |
| Terminal | — | TV=$286.29 | PV(TV)=$132.61 (64% of IV) | $208.12 |
| Intrinsic Value | — | — | PV(Divs) $75.52 + PV(TV) $132.61 | $208.12 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.00%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $286.29. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $132.61). Intrinsic value = PV of all dividends ($75.52) + PV of terminal value ($132.61) = $208.12 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.0% | $223 | $242 | $267 | $300 | $346 |
| 6.5% | $200 | $215 | $233 | $257 | $289 |
| 7.0% | $181 | $193 | $207 | $225 | $248 |
| 7.5% | $166 | $175 | $186 | $200 | $217 |
| 8.0% | $153 | $160 | $169 | $180 | $193 |
| 8.5% | $142 | $148 | $155 | $164 | $174 |
| 9.0% | $132 | $137 | $143 | $150 | $158 |
| 9.5% | $124 | $128 | $133 | $138 | $145 |
| 10.0% | $116 | $120 | $124 | $129 | $134 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $6.060 |
| Current Yield | 5.03% |
| Consecutive Growth Years | 14 |
| 1-yr DPS CAGR | +3.1% |
| 3-yr DPS CAGR | +2.6% |
| 5-yr DPS CAGR | +8.1% |
| 10-yr DPS CAGR | +6.5% |
| Payout Ratio (DPS/EPS) | 160.2% ⚠️ |
| FCF Payout Ratio | 69.4% |
| Sustainability Verdict | Safe |
Dividend is safe — DPS/Core FFO payout = $6.06/$8.74 = 69%, leaving 31% of earnings for reinvestment. GAAP payout ratio overstates risk (REIT depreciation is non-cash). 14 consecutive years of dividend increases. Balance sheet supports: $879M liquidity, investment-grade rating. FY2025 DPS +3.1% — modest growth reflects supply headwind conservatism; DPS growth likely to reaccelerate to 4-6%/yr as Core FFO recovers.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $4.61 | — | — | — | Actual |
| 2022 | $5.48 | — | — | — | Actual |
| 2023 | $4.71 | — | — | — | Actual |
| 2024 | $4.49 | — | — | — | Actual |
| 2025 | $3.78 | — | — | — | Actual |
| 2026 | $3.03 | $3.32 | $3.61 | 13 | Estimate |
| 2027 | $3.15 | $3.43 | $3.86 | 11 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $1.8B | — | — | — | Actual |
| 2022 | $2.0B | — | — | — | Actual |
| 2023 | $2.1B | — | — | — | Actual |
| 2024 | $2.2B | — | — | — | Actual |
| 2025 | $2.2B | — | — | — | Actual |
| 2026 | $2.2B | $2.3B | $2.4B | 13 | Estimate |
| 2027 | $2.2B | $2.3B | $2.5B | 11 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Brad Heffern | RBC Capital Markets | Buy | $175 | +45.1% |
| Alexander Goldfarb | Piper Sandler | Buy | $170 | +41.0% |
| Adam Kramer | Morgan Stanley | Buy | $156 | +29.4% |
| Michael Lewis | Truist Securities | Strong Buy | $142 | +17.8% |
| Richard Hightower | Barclays | Hold | $138 | +14.5% |
| Nicholas Yulico | Scotiabank | Hold | $138 | +14.5% |
💡 Investment Thesis
- Supply cycle turning point: New multifamily construction starts have declined sharply since 2024; existing deliveries will peak and fade through 2026-2027. MAA's Sunbelt markets are expected to see same-store NOI growth inflect positive by mid-2026 as the supply headwind reverses — the exact catalyst for REIT re-rating.
- Superior Sunbelt demographics: Texas, Florida, and Southeast markets continue gaining population and jobs at 2-3× the national average. Rental demand structural tailwinds include housing affordability crisis, millennials aging into prime rental years, and migration from high-cost coastal metros.
- Conservative balance sheet: Investment-grade credit (Baa1/BBB+); debt/EBITDA ~4.4× (below REIT peer average ~5×); $879M liquidity available. Refinanced $400M at 4.65% in Q4 2025 — proactive liability management extends maturity profile.
- Attractive entry multiple: At $120.57, MAA trades at 13.8× Core FFO — a substantial discount to the 5-year average P/FFO of ~18-20×. Analyst consensus target $149 implies 24% upside. The stock is pricing in permanent impairment that the supply data does not support.
- Growing development pipeline: 2,522 units under construction ($932M); three additional land parcels acquired for future development. Development delivers growth beyond the same-store recovery at yields of 5.5-6.5% — accretive to NAV as markets recover.
⚖️ DDM Verdict: Accumulate — Mid-America Apartment Communities, Inc. (MAA)
Current price: $120.57 | Analyst Avg PT: $149.22
$142
🔴 Bear
$169
📊 Base
$208
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$156 | Begin position |
| Tier 2 — Add | ≤$156 | Add on weakness |
| Tier 3 — Full | ≤$149 | Full allocation |
| Sell Alert | ≥$177 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
At $120.57, MAA offers a compelling risk/reward with 24% upside to analyst consensus PT of $149 and a 5.0% dividend yield. The stock is near multi-year lows on a P/FFO basis, trading at a discount that overstates the permanence of Sunbelt supply headwinds. The base DDM intrinsic value of ~$168 implies significantly more upside as the supply cycle turns and Core FFO recovers.
Accumulate below $130; add aggressively below $115 (6%+ yield, <14× FFO). The position becomes a Hold above $155 and a Sell above the bull target. Primary risk: Sunbelt new supply takes longer to absorb than expected, delaying the rental rate recovery to 2028 or beyond.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FFO vs GAAP EPS | REIT valuation uses Core FFO/share as the distributable earnings base, not GAAP EPS. GAAP EPS ($3.78) depressed by $622M D&A. Core FFO FY2025 $8.74/share (management reported). Payout ratio 69% on FFO — healthy and sustainable. |
| Ke Build | Ke = Rf(4.3%) + β(0.70) × ERP(5.5%) = 4.3% + 3.85% = 8.15%; rounded down to 8.0% for stable residential REIT with investment-grade balance sheet and 14yr dividend streak. Beta 0.70 reflects low correlation to economic cycle (residential rental demand is defensive). |
| Base Growth g1=3% | Conservative near-term growth reflecting ongoing supply pressure. Analysts model revenue +2.7% FY2026. Management FY2026 Core FFO guidance $8.50-9.00 implies -2.7% to +3.0% growth — split the difference at 0% for near-term, accelerating to 3-4% as supply normalizes. Stage 1 3% is appropriate blend. |
| Supply Cycle Timing | The critical variable is when new apartment deliveries fall below demand absorption. Current analysis puts the inflection in mid-2026 to 2027 for most Sunbelt markets. Bear case extends this to 2028-2029. Bull case sees it arriving Q2-Q3 2026 as permits collapsed in 2024. |
| NAV Cross-Check | Rough NAV: $23.2B real estate at book, ~5% cap rate implies $22-24B property value. Net debt $5.35B. Equity NAV ~$17B / 117M shares = ~$145-205/share depending on cap rate assumption. Base DDM IV within this range supports conclusion. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.