Real-estate investment trust American Homes 4 Rent is well-positioned as single-family home rentals become more in demand, according to Goldman Sachs. Analyst Chandni Luthra upgraded the stock to buy from neutral, citing the company's focus on the area of rentals slated to become hotter in the changing economy. Her price target of $39 implies a 19.1% upside over where it closed Wednesday. "We remain constructive on the strong demand for housing amidst a shortage crisis, and single-family rental (SFR) is well positioned as homeownership continues to be very expensive, boding well for the long-term fundamental," she said in a note to clients. Homebuilders have slowed new home construction amid inflation and supply chain challenges. Potential homebuyers may also be deterred by elevated mortgages, which are a result of higher interest rates. These factors all help single-family rentals, Luthra said, as more people get pushed away from buying but still need housing. Though rental prices are coming off pandemic highs, Luthra said American Homes 4 Rent should be able to keep them above pre-pandemic levels. American Homes 4 Rent has increased its number of new homes, moving from around 600 in 2018 to nearly 2,150 in 2022. These newly constructed homes are also cheaper to maintain, Luthra said, which can bring costs down. Meanwhile, the company is feeling labor and input cost relief as demand for homebuilding declines. But Luthra said inflation remains in costs related to construction processes that come after drywall is installed. Comparatively, Luthra said she sees a clearer growth story in American Homes 4 Rent than competitors such as Invitation Homes and Tricon Residential despite both also benefiting from the focus on single-family home rentals. Invitation has been hurt by bad debt, higher property taxes and ongoing litigation, she had. Higher leverage and interest rates, paired with a slowed growth without acquisitions, has hampered Tricon. — CNBC's Michael Bloom contributed to this report.