HOUSTON-based Camden Property Trust (NYSE:CPT), an $11.8 billion real estate investment trust (REIT) with a "GOOD" InvestingPro financial health rating, has been named in a civil antitrust lawsuit by the U.S. Department of Justice (DOJ) and ten states.
The lawsuit, which also names six other multi-family housing operators, alleges collusion to fix rents in violation of the Sherman Act. The actions are connected to the use of revenue management software provided by RealPage, Inc.
The information, disclosed in a regulatory filing with the Securities and Exchange Commission (SEC) on January 10, 2025, follows earlier reports that Camden had been named as a defendant in several similar cases. The company has also received a Civil Investigative Demand from the DOJ for information regarding its use of the software.
Camden Property Trust, listed on the New York Stock Exchange under the symbol NYSE:CPT, stated in the filing that the lawsuits are without merit and that it intends to defend itself vigorously. Trading at $109.16, analysis from InvestingPro suggests the stock is currently fairly valued.
The company has maintained dividend payments for 32 consecutive years, demonstrating long-term stability despite legal challenges. However, the outcome of these legal proceedings and the potential financial impact cannot be predicted or estimated at this time.
The SEC filing also included routine financial statements and exhibits, such as the Cover Page Interactive Data File, formatted in Inline XBRL. The company's Senior Vice President - Chief Accounting Officer, Michael P. Gallagher, signed the report, affirming Camden's compliance with SEC requirements.
The allegations against Camden and other defendants revolve around the use of RealPage's revenue management software, which is suspected of being a tool for coordinating rental prices, a practice that would be in violation of federal antitrust laws.
This legal development is significant for investors and the broader real estate market, as it could have implications for the use of pricing software in the industry. With analyst price targets ranging from $115 to $142 and the company's next earnings report due on January 30, 2025, investors seeking deeper insights can access comprehensive analysis and additional ProTips through InvestingPro's detailed research reports. However, it is important to note that the filing is based on a press release statement and does not represent any conclusions or broader industry impacts.
In other recent news, Camden Property Trust has been the focus of several developments. The company has been implicated in an expanded antitrust lawsuit by the U.S. Justice Department and state co-plaintiffs. Accused of colluding with other major landlords to artificially inflate rental prices, Camden Property Trust is alleged to have used data and software provided by RealPage Inc. to maintain high rental prices.
In analyst news, JPMorgan downgraded Camden Property Trust from Neutral to Underweight due to concerns about the company's near-term growth prospects. Similarly, Stifel downgraded the company from Buy to Hold, citing a projected growth rate that falls short of its peers. RBC Capital Markets also cut its price target for Camden Property Trust, citing a decline in leasing activity and potential challenges in achieving funds from operations growth in the coming year.
Camden Property Trust recently reported Q3 2024 results that exceeded expectations, with core funds from operations reaching $1.71 per share. Despite the challenges, the company is focusing on disciplined capital allocation and shifting its strategic focus towards suburban development.
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