RMR Group Inc (RMR) Receives New Coverage from Analysts at Canaccord Genuity

Canaccord Genuity initiated coverage on shares of RMR Group Inc (NYSE:RMR) in a research note released on Wednesday. The firm issued a buy rating and a $72.00 price objective on the financial services provider’s stock.

“We are initiating on RMR Group with a BUY rating and $72 price target. Given outsized operating leverage, the key to success as an asset manager is to grow AUM, generate performance fees, or some combination of both. Our BUY rating is not just predicated on our belief that RMR can deliver both, but additionally we believe the Street is materially underestimating potential incentive fees in 2018 and 2019. From a growth perspective, we still see pockets of acquisition opportunities across the REIT space and believe the managed REITs have plenty of debt capacity to grow the AUM base without weighing on REIT stock performance and thus no drag on incentive payments. Finally, as RMR’s operating margins are best-in-class among asset manager peers, we believe this should translate to relatively sharper growth on the bottom line. Our BUY rating is driven by: Incentive fees materially under-estimated by sell-side. We estimate that 1Q18 and 1Q19 incentive payments will be well above the Street’s expectations based on where the REITs are trading. Our calculation of $149M in 1Q18 leads our 2018 EPS to be 75% above consensus. At the current consensus 2018 PE multiple of 17.1x, we estimate the difference in incentive revenues represents $35.27 upside to the stock price, all else equal.”,” Canaccord Genuity’s analyst wrote.

Several other analysts have also weighed in on the stock. Zacks Investment Research lowered shares of RMR Group from a buy rating to a hold rating in a research note on Thursday, April 13th. Oppenheimer Holdings Inc. started coverage on shares of RMR Group in a research note on Tuesday, April 18th. They issued a market perform rating for the company. Finally, FBR & Co reiterated a mkt perform rating and issued a $48.00 price objective (up previously from $44.00) on shares of RMR Group in a research note on Friday, May 12th. Three equities research analysts have rated the stock with a hold rating and two have assigned a buy rating to the company’s stock. RMR Group presently has a consensus rating of Hold and an average price target of $59.33.

RMR Group (RMR) traded up 1.32% on Wednesday, hitting $49.75. 5,547 shares of the stock were exchanged. The stock has a market capitalization of $800.68 million and a P/E ratio of 17.97. RMR Group has a one year low of $28.32 and a one year high of $55.10. The company has a 50 day moving average of $51.27 and a 200 day moving average of $46.93.

RMR Group (NYSE:RMR) last released its quarterly earnings data on Wednesday, May 10th. The financial services provider reported $0.43 earnings per share for the quarter, missing the consensus estimate of $0.44 by $0.01. The firm had revenue of $54.30 million for the quarter, compared to the consensus estimate of $52.79 million. On average, equities research analysts forecast that RMR Group will post $2.83 earnings per share for the current fiscal year.

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The business also recently disclosed a quarterly dividend, which was paid on Thursday, May 18th. Stockholders of record on Friday, April 21st were paid a $0.25 dividend. The ex-dividend date was Wednesday, April 19th. This represents a $1.00 annualized dividend and a dividend yield of 2.04%.

Hedge funds have recently added to or reduced their stakes in the stock. Engine Capital Management LLC raised its stake in shares of RMR Group by 977.4% in the first quarter. Engine Capital Management LLC now owns 113,569 shares of the financial services provider’s stock worth $5,622,000 after buying an additional 103,028 shares during the period. Mckinley Capital Management LLC Delaware acquired a new stake in shares of RMR Group during the first quarter worth approximately $3,366,000. Seizert Capital Partners LLC acquired a new stake in shares of RMR Group during the first quarter worth approximately $2,581,000. Dimensional Fund Advisors LP raised its stake in shares of RMR Group by 81.9% in the fourth quarter. Dimensional Fund Advisors LP now owns 112,471 shares of the financial services provider’s stock worth $4,443,000 after buying an additional 50,624 shares during the period. Finally, Prudential Financial Inc. raised its stake in shares of RMR Group by 348.8% in the first quarter. Prudential Financial Inc. now owns 62,097 shares of the financial services provider’s stock worth $3,074,000 after buying an additional 48,260 shares during the period.

About RMR Group

The RMR Group Inc is a holding company. The Company’s business is primarily conducted by its subsidiary, The RMR Group LLC (RMR LLC). The Company’s segments include RMR LLC and All Other Operations. RMR LLC manages a portfolio of publicly owned real estate and real estate related businesses. RMR LLC manages Government Properties Income Trust, a real estate investment trust (REIT) that primarily owns properties that are leased to government tenants; Hospitality Properties Trust, an REIT that primarily owns hotels and travel centers; Select Income REIT, an REIT that primarily owns properties leased to single tenants across the United States and leased lands in Hawaii, and Senior Housing Properties Trust, an REIT that primarily owns senior living communities and medical office buildings.

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