Morgan Stanley downgrades AvalonBay Communities stock rating on earnings outlook

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Morgan Stanley downgraded AvalonBay Communities (NYSE:AVB) to Equalweight from Overweight, reducing its price target to $203 from $208. The downgrade stems from a revised earnings outlook, with projections for 2026 and 2027 showing roughly flat core funds from operations per share compared to 2025. Despite this, Morgan Stanley’s 2028 estimate remains above consensus due to lower projected interest expenses, and AvalonBay maintains a strong dividend history.

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