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SL Green (SLG) to Break Its Beat Streak This Earnings Season
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SL Green Realty Corp. (SLG - Free Report) is slated to report second-quarter 2020 results on Jul 22, after market close. The company’s quarterly results will likely reflect a year-over-year decline in funds from operations (FFO) per share and revenues.
In the last reported quarter, this New York-office landlord reported 2020 FFO per share of $2.08, surpassing the Zacks Consensus Estimate of $1.70. Results reflected decent leasing activities in the company’s Manhattan portfolio.
Over the preceding four quarters, the company surpassed the Zacks Consensus Estimate in all four occasions. It reported an earnings surprise of 7.32%, on average, during this period. The graph below depicts the surprise history.
SL Green Realty Corporation Price and EPS Surprise
The office real estate market felt the full effect of the coronavirus pandemic in the second quarter, with demand for such properties decreasing amid a blow to the labor markets and higher adoption of remote working.
According to a Cushman & Wakefield (CWK - Free Report) report, net absorption for the quarter was -22.8 million square feet of space, declining steeply from the prior quarter’s 5.2 million square feet of space. Moreover, the national office vacancy rate increased 50 basis points (bps) sequentially to 13.7%.
Nonetheless, the supply of office space remained in check during the quarter likely due to the coronavirus outbreak-led construction interruptions. In fact, completed office space during the second quarter was 9.9 million square feet of space, down from 13 million square feet completed in the March-end quarter. Additionally, similar to trends observed during the Great Recession, asking rents for the quarter continued to increase despite an increase in vacancies. In fact, asking rents sequentially increased 1.5% to $34.03 per square foot during the June-end quarter.
In such an office leasing environment, the company’s leasing activities during the quarter continued at a moderate pace, with 12 leases totaling 107,325 square feet of office space inked in the first three weeks of second-quarter 2020.
Moreover, the company’s overall rent collections have remained healthy, with overall receipts for April and May being 89.1% and 84.7%, respectively.
Also, amid the continuing unprecedented times, when business operations and rent collections remain uncertain, liquidity has become a focal point within the REIT industry. SL Green too made such efforts and in June it achieved the aim to bolster the liquidity position to $1 billion, a month ahead of the schedule.
However, in order to achieve this, the company shrunk its debt and preferred equity (DPE) portfolio and executed the sale of real estate assets and the joint venture stake.
In fact, a likely decline in the average balance and average yield in the company’s DPE investments is expected to have decreased its investment income to $36.66 million for the second quarter from $38.53 million reported for the March-end end.
Moreover, the coronavirus pandemic and measures to curb its spread have affected retail tenants’ operations. In fact, the company’s retail rent collections for April and May totaled 63.3% and 54.7%, respectively. This is expected to have impacted the company’s rental revenues for the quarter under review. Notably, the Zacks Consensus Estimate for second-quarter 2020 rental revenues is pegged at $184.3 million, suggesting a 14.9% year-over-year decline.
Also, the Zacks Consensus Estimate for second-quarter 2020 escalations and reimbursements is pegged at $25.7 million and indicates a 5.3% decline from the prior quarter’s reported figure.
Lastly, the company’s activities during the quarter were inadequate to gain analyst confidence. Consequently, the Zacks Consensus Estimate for second-quarter FFO remained unchanged at $1.56 over the past month. Further, it indicates a 14.3% decline year over year.
Earnings Whispers
Here is what our quantitative model predicts:
SL Green does not have the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of a FFO beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for SL Green is -3.66%.
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Host Hotels & Resorts, Inc. (HST - Free Report) , set to report quarterly numbers on Jul 30, currently has an Earnings ESP of +17% and a Zacks Rank of 3.
First Industrial Realty Trust, Inc. (FR - Free Report) , slated to release second-quarter earnings on Jul 22, has an Earnings ESP of +0.96% and a Zacks Rank of 2 (Buy) at present.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gau0ge the performance of REITs.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
SL Green (SLG) to Break Its Beat Streak This Earnings Season
SL Green Realty Corp. (SLG - Free Report) is slated to report second-quarter 2020 results on Jul 22, after market close. The company’s quarterly results will likely reflect a year-over-year decline in funds from operations (FFO) per share and revenues.
In the last reported quarter, this New York-office landlord reported 2020 FFO per share of $2.08, surpassing the Zacks Consensus Estimate of $1.70. Results reflected decent leasing activities in the company’s Manhattan portfolio.
Over the preceding four quarters, the company surpassed the Zacks Consensus Estimate in all four occasions. It reported an earnings surprise of 7.32%, on average, during this period. The graph below depicts the surprise history.
SL Green Realty Corporation Price and EPS Surprise
SL Green Realty Corporation price-eps-surprise | SL Green Realty Corporation Quote
Key Factors to Note
The office real estate market felt the full effect of the coronavirus pandemic in the second quarter, with demand for such properties decreasing amid a blow to the labor markets and higher adoption of remote working.
According to a Cushman & Wakefield (CWK - Free Report) report, net absorption for the quarter was -22.8 million square feet of space, declining steeply from the prior quarter’s 5.2 million square feet of space. Moreover, the national office vacancy rate increased 50 basis points (bps) sequentially to 13.7%.
Nonetheless, the supply of office space remained in check during the quarter likely due to the coronavirus outbreak-led construction interruptions. In fact, completed office space during the second quarter was 9.9 million square feet of space, down from 13 million square feet completed in the March-end quarter. Additionally, similar to trends observed during the Great Recession, asking rents for the quarter continued to increase despite an increase in vacancies. In fact, asking rents sequentially increased 1.5% to $34.03 per square foot during the June-end quarter.
In such an office leasing environment, the company’s leasing activities during the quarter continued at a moderate pace, with 12 leases totaling 107,325 square feet of office space inked in the first three weeks of second-quarter 2020.
Moreover, the company’s overall rent collections have remained healthy, with overall receipts for April and May being 89.1% and 84.7%, respectively.
Also, amid the continuing unprecedented times, when business operations and rent collections remain uncertain, liquidity has become a focal point within the REIT industry. SL Green too made such efforts and in June it achieved the aim to bolster the liquidity position to $1 billion, a month ahead of the schedule.
However, in order to achieve this, the company shrunk its debt and preferred equity (DPE) portfolio and executed the sale of real estate assets and the joint venture stake.
In fact, a likely decline in the average balance and average yield in the company’s DPE investments is expected to have decreased its investment income to $36.66 million for the second quarter from $38.53 million reported for the March-end end.
Moreover, the coronavirus pandemic and measures to curb its spread have affected retail tenants’ operations. In fact, the company’s retail rent collections for April and May totaled 63.3% and 54.7%, respectively. This is expected to have impacted the company’s rental revenues for the quarter under review. Notably, the Zacks Consensus Estimate for second-quarter 2020 rental revenues is pegged at $184.3 million, suggesting a 14.9% year-over-year decline.
Also, the Zacks Consensus Estimate for second-quarter 2020 escalations and reimbursements is pegged at $25.7 million and indicates a 5.3% decline from the prior quarter’s reported figure.
Lastly, the company’s activities during the quarter were inadequate to gain analyst confidence. Consequently, the Zacks Consensus Estimate for second-quarter FFO remained unchanged at $1.56 over the past month. Further, it indicates a 14.3% decline year over year.
Earnings Whispers
Here is what our quantitative model predicts:
SL Green does not have the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of a FFO beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for SL Green is -3.66%.
Zacks Rank: It currently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Host Hotels & Resorts, Inc. (HST - Free Report) , set to report quarterly numbers on Jul 30, currently has an Earnings ESP of +17% and a Zacks Rank of 3.
First Industrial Realty Trust, Inc. (FR - Free Report) , slated to release second-quarter earnings on Jul 22, has an Earnings ESP of +0.96% and a Zacks Rank of 2 (Buy) at present.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gau0ge the performance of REITs.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>