UDR (UDR): Assessing Valuation After Investor Focus Shifts to Sector Risks Despite Positive Results

If you’re following UDR (UDR) and wondering what’s next after the latest moves, you’re not alone. The company just reaffirmed its regular quarterly dividends on both its common and preferred stock, highlighting its steady approach to shareholder returns. Yet, despite reporting revenue and funds from operations growth for the second quarter of 2025, the market seems to be more focused on the ongoing sector concerns over high interest rates, and UDR’s share price has moved lower, even in the face of positive company updates.

Looking at the big picture, UDR’s stock has been in a rough patch this year, lagging the broader real estate sector amid persistent worries about rising borrowing costs. Even with consistent dividend payments, now marking the 212th consecutive payout, and stronger-than-expected quarterly results, momentum has been fading, with the stock trending down both in the short and long term. The broader pressure facing real estate investment trusts is clearly in play.

So, after this year’s slide, does UDR now offer a value opportunity, or is the market right in factoring in more risk ahead?

Most Popular Narrative: 15.7% Undervalued

The most widely followed narrative suggests UDR is trading at a notable discount to fair value, implying significant upside according to consensus expectations.

Portfolio optimization, rotating out of lower-growth assets into higher-yielding East/West Coast and selected Sunbelt markets with robust fundamentals, continues to support higher average rent roll growth and NOI expansion. This improves UDR's earnings trajectory. Innovations such as smart home upgrades, customer experience initiatives, and offering value-added services (leading to double-digit other income growth) are driving operational efficiencies and tenant retention, which likely supports higher margins and long-term net operating income growth.

Curious what could justify such a big gap between price and projected value? This narrative hinges on bold revenue and profit margin assumptions, plus some optimistic growth moves that might surprise you. Wondering what strategic shifts and growth levers analysts believe will push UDR much higher? There is a surprising earnings blueprint behind this fair value. Discover how it compares to other REITs and what could be fueling analysts’ bullish stance.

Result: Fair Value of $44.12 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent supply pressures in key Sunbelt and urban markets, or tougher rent control policies, could challenge UDR’s optimistic growth outlook.

Find out about the key risks to this UDR narrative.

Another View: What Do Market Multiples Say?

While analysts see upside, the numbers tell a different story. Based on how similar apartment REITs are valued in the market, UDR’s shares appear expensive, even with the optimism. The fair value could be much lower.

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding UDR to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own UDR Narrative

If the consensus view doesn’t quite resonate with your thinking, you’re free to dig into the latest numbers and assemble your own perspective in minutes. Do it your way.

A great starting point for your UDR research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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