Miller Lowers Aimco Earnings Estimate

In a recent report, Miller, senior REIT & lodging analyst for UBS Investment Research, says that his group his lowering Aimco's FFO per share for this year by 32 cents and next year by 27 cents, to $3.03 for all of 2004 and $3.33 in 2005. "Our revisions are due to primarily lower investment volumes, and more conservative timing related to these investments and lower variable fee [and] other income," according to the report. The company set its 2004 FFOPS forecast at $2.85 to $3.20.

Miller's report also says that Aimco, which trades under the symbol AIV, is making positive internal changes, but they want to see results. "Despite providing 2004 expectations below the Street's forecast, AIV management continues to articulate the positive steps being taken from both an operational and reporting perspective," according to the UBS report. "We believe positive management, operating and performance incentive changes are being made at AIV and expect to see the benefits of these changes in the coming quarters."

Miller says he is making more conservative investment and transaction assumptions. "We expect AIV to be a net seller of assets in 2004, weighted toward [the first quarter] in order to provide additional financial flexibility and dividend safety," he says in the report. "We also have assumed activity based fees, and other variable income sources are at the bottom end of AIV's forecast."

Miller's team, which includes Chris Pike and Harmon Handorf, also is lowering its target price by $1 to $37 per share. But that will still provide a projected 19.8% total return. Miller is keeping its "Buy 2" rating in place.