UBS reiterates Sun Communities stock rating citing rental rate gains

UBS has reaffirmed its Neutral rating on Sun Communities, assigning a $117 price target to the stock. Despite the shares currently trading at $119.84 with a market cap of $14.88 billion, UBS believes the company's rental rates are rising. The firm highlights 5.4% rental rates for manufactured housing and 4.4% for RVs, both up 40 basis points from 2026 levels.

Same-store revenue growth for manufactured housing in Q3 2026 was 5.8%, down from 6.2% in the previous quarter. Base rent per site rose 5.2%, compared to 4.9% in the prior quarter. RV same-store revenue increased 2.4% in Q3 2026, down from 3.8% in the second quarter, but transient RV revenue fell 1.1% year-over-year. However, transient RV revenue per site increased by 8%.

UBS notes the stock is trading at an 8% discount to ELS, compared to its five-year average of 15%. The company's dividend yield stands at 3.74%.