In a highly volatile week across global financial markets, U.S. equity markets ultimately finished the week little-changed, while benchmark interest rates rebounded from the lowest levels of the year. Following a historic surge in volatility, stabilization in Asian and European markets, decent jobless claims data, and clarity on the domestic Presidential matchup helped to ease market jitters. Narrowly avoiding a fourth-straight week of losses, the S&P 500 finished flat - staging a late-week rebound after sharp declines early in the week. The Nasdaq remained in "correction territory."

Here is how AvalonBay Communities (AVB) and Jackson Financial (JXN) have performed compared to their sector so far this year.

AvalonBay shares have performed well, delivering almost 17% total returns in half a year, outpacing the S&P 500 index. The company faces higher operating costs, a more demanding valuation due to increased share prices, and potential risks from rent control measures and a weakening economy. Despite strong development capabilities and solid results, the valuation margin of safety has essentially disappeared, while risks have increased.

The next cycle for public REITs could be more similar to those of the 1990s and early 2000s than one of the past 14 years. In prior cycles, public REITs enjoyed a cost of capital that allowed for significant external growth, boosting cash flow and dividends per share. Many companies spent the past cycle shoring up their balance sheets to record low leverage and maintaining a low dividend payout to enhance flexibility.

AvalonBay (AVB) is well positioned to outperform the market, as it exhibits above-average growth in financials.

AvalonBay Communities, Inc. (NYSE:AVB ) Q2 2024 Earnings Conference Call August 1, 2024 1:00 PM ET Company Participants Jason Reilley - VP, IR Benjamin Schall - President, CEO & Director Kevin O'Shea - SVP, Finance, Treasurer Sean Breslin - COO Matthew Birenbaum - Chief Investment Officer Conference Call Participants Eric Wolfe - Citi Austin Wurschmidt - KeyBanc Capital Markets John Kim - BMO Capital Markets Jamie Feldman - Wells Fargo Adam Kramer - Morgan Stanley John Pawlowski - Green Street Josh Dennerlein - Bank of America Merrill Lynch Michael Goldsmith - UBS Alexander Goldfarb - Piper Sandler Omotayo Okusanya - Deutsche Bank Richard Anderson - Wedbush Operator Good morning, ladies and gentlemen, and welcome to AvalonBay Communities Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Your host for today's conference is Mr.

Over the past month we have observed some very interesting activity across the market's more defensive sectors, considerable outperformance. Below we can see just how significantly the Utilities ( XLU ), Healthcare ( XLV ), Energy ( XLE ) and Real Estate ( XLRE ) sector ETF have outperformed the S&P 500 (in orange).

AvalonBay's (AVB) Q2 earnings reflect a year-over-year increase in same-store total revenues. It has also raised its 2024 core FFO per share outlook.

Although the revenue and EPS for AvalonBay (AVB) give a sense of how its business performed in the quarter ended June 2024, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.

AvalonBay Communities (AVB) came out with quarterly funds from operations (FFO) of $2.77 per share, beating the Zacks Consensus Estimate of $2.71 per share. This compares to FFO of $2.66 per share a year ago.

Besides Wall Street's top -and-bottom-line estimates for AvalonBay (AVB), review projections for some of its key metrics to gain a deeper understanding of how the company might have fared during the quarter ended June 2024.

While AvalonBay's (AVB) Q2 results are likely to show the benefits of its diversified portfolio and technological initiatives, high supply and elevated interest rates are likely to have acted as a spoilsport.