Sun Communities (SUI) has been rated a "Buy" by Citi, despite a disappointing earnings report and a significant guidance cut. The stock is currently trading at $123.90, down 5.97% from the previous close. The report highlights the return of John McLaren as President, a move seen as positive for the company's restructuring efforts. Current CEO Gary Shiffman announced his retirement in 2025, emphasizing that all opportunities to maximize shareholder value will be considered. Citi notes, "The importance of John McLaren returning as President to oversee the 'restructuring' of the company shouldn't be overlooked."
SUI's core FFO guidance was reduced by approximately 4.8% to a midpoint of $6.80, driven by higher expense growth, particularly in North America. The report raises questions about internal controls, as expenses like landscaping and advertising are within the company's control. Citi is optimistic about SUI's long-term potential, citing solid same-store NOI growth and accretive external growth through acquisitions and developments.