ACC – Market expectations are for record-high Uniform ROA, but management may have concerns about liquidity, leasing activity, and residents

• American Campus Communities, Inc. (ACC:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 50.7x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about liquidity, leasing activity, and the financial position of residents
  
  

• Specifically, management may lack confidence in their ability to reduce their debt-to-assets ratio, create liquidity, and fund remaining capital development needs. In addition, they may have concerns about the sustainability of leasing activity in their open market properties, leasing activity near universities with a predominantly online curriculum, and universities conducting in-person classes. Moreover, management may be exaggerating optimism for the upcoming academic year, the potential of student renters’ financial position and buying power to improve, and how well positioned their long-term investments are. Finally, management may have concerns about residents’ ability to continue paying rent, the effectiveness of financial relief programs, and lack of summer camp business