Invitation Homes Earnings: Announces Large Portfolio Acquisition Alongside Strong Rent Growth

Invitation Homes reported second-quarter results that were in line with our expectations, leading us to reaffirm our $40 fair value estimate for the no-moat company. Same-store occupancy fell 20 basis points sequentially to 97.6%, though that is slightly better than our estimate of 97.3% occupancy. Average rental rates increased 7.4% year over year, in line with our estimate of 7.3% growth, leading to same-store revenue growth of 5.9% in the second quarter. However, same-store operating expenses increased 11.2% in the quarter largely due to a 36.5% increase in turnover costs and a 46.9% increase in property administrative costs from higher lease compliance costs. As a result, same-store net operating income only grew 3.6% in the second quarter, though that is slightly better than our estimate of 2.8% growth. Invitation Homes reported core funds from operations of $0.44 per share in the second quarter, which matched our estimate and is 2 cents better than the $0.42 figure the company reported in the second quarter of 2022.