Robert W. Baird downgraded Education Realty Trust (EDR) to neutral from outperform, citing the company's third quarter results posted Monday.
Analyst Christopher Lucas says the company again reported disappointing results -- 3 cents funds from operation in the third quarter vs. 15 cents consensus estimates -- reflecting the company's increased operating costs, above-budget maintenance, and marketing costs. He thinks this has damaged management's credibility, with investors likely now to take a "show me" attitude. He cut his 63 cents 2006 funds from operation estimate to 47 cents and his $1.31 2007 estimate to $1.08. He says his lower estimates put focus on the possibility of a reduced dividend. He recommends the stock at prices below $13.50, and cuts his $20 target to $15.