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What's in the Cards for Alexandria's (ARE) Q4 Earnings?
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Alexandria Real Estate Equities Inc. (ARE - Free Report) is scheduled to report fourth-quarter and full-year 2020 results on Feb 1, after market close. The company’s results are expected to reflect year-over-year growth in funds from operations (FFO) per share.
In the last reported quarter, this Pasadena, CA-based urban office real estate investment trust (REIT), which primarily focuses on collaborative life-science and technology campuses, delivered an in-line performance in terms of FFO per share. The company witnessed continued strong leasing activity and rental rate growth during the third quarter.
Over the trailing four quarters, the company met the Zacks Consensus Estimate on three occasions and missed in the other, the average negative surprise being 0.14%. The graph below depicts this surprise history:
Alexandria Real Estate Equities, Inc. Price and EPS Surprise
Let’s see how things have shaped up prior to this announcement.
Factors at Play
Alexandria is likely to have enjoyed solid leasing activity, decent rental rate growth and occupancy during the quarter under review. This is because the company’s properties and its tenants have become indispensable amid the heightening need for effective diagnostics, therapies and vaccines to fight the coronavirus pandemic.
In fact, with higher investments in pharmaceutical research and development as well as critical monetary support from the government and hirings by its tenants, Alexandria’s lab-office assets are anticipated to have enjoyed high demand during the fourth quarter.
Particularly, elevated demand for its Class A properties in AAA locations is likely to have boosted occupancy levels. Ownership of such premium properties in strategic cluster locations is also likely to have driven rent growth during the December-end quarter.
Further, a significant part of the company’s revenues comes in from investment-grade or publicly-traded large-cap tenants. Also, with its campuses being essential and mission-critical for the tenants, rent collections during the to-be-reported quarter is likely to have been solid. These are likely to have aided revenue and net operating income growth for the company during the fourth quarter.
The Zacks Consensus Estimate for the fourth-quarter FFO per share is currently pinned at $1.84, calling for a 3.95% increase from the prior-year period.
However, there is a weakness in demand for spaces from tenants belonging to the technology industry. Nevertheless, the company has a comparatively smaller exposure to this industry.
Amid these, prior to the fourth-quarter earnings release, there is lack of any solid catalyst to be optimistic. Therefore, the Zacks Consensus Estimate for the quarterly FFO per share has remained unchanged over the past month.
The company has guided for 2020 FFO per share in the range of $7.29-$7.31. The Zacks Consensus Estimate for the same has been unrevised at $7.30 in the past month. Nevertheless, the figure indicates a 4.9% increase year over year.
Notably, the company’s current-year guidance is backed by expectations for occupancy in North America in the band of 94.8-95.4%, rental rate increases for lease renewals, and re-leasing of space of 30.5-33.5%, and same-property NOI growth of 1-3%.
Here is what our quantitative model predicts:
Alexandria does not have the right combination of the two key ingredients — a positive Earnings ESP and a 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 Alexandria is -0.09%.
Zacks Rank: Alexandria currently carries a Zacks Rank of 3 (Hold).
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:
Healthpeak Properties, Inc. , scheduled to report earnings figures on Feb 9, has an Earnings ESP of +4.40% and holds a Zacks Rank of 3 at present.
Stag Industrial, Inc. (STAG - Free Report) , slated to release quarterly numbers on Feb 10, currently has an Earnings ESP of +2.13% and carries a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
What's in the Cards for Alexandria's (ARE) Q4 Earnings?
Alexandria Real Estate Equities Inc. (ARE - Free Report) is scheduled to report fourth-quarter and full-year 2020 results on Feb 1, after market close. The company’s results are expected to reflect year-over-year growth in funds from operations (FFO) per share.
In the last reported quarter, this Pasadena, CA-based urban office real estate investment trust (REIT), which primarily focuses on collaborative life-science and technology campuses, delivered an in-line performance in terms of FFO per share. The company witnessed continued strong leasing activity and rental rate growth during the third quarter.
Over the trailing four quarters, the company met the Zacks Consensus Estimate on three occasions and missed in the other, the average negative surprise being 0.14%. The graph below depicts this surprise history:
Alexandria Real Estate Equities, Inc. Price and EPS Surprise
Alexandria Real Estate Equities, Inc. price-eps-surprise | Alexandria Real Estate Equities, Inc. Quote
Let’s see how things have shaped up prior to this announcement.
Factors at Play
Alexandria is likely to have enjoyed solid leasing activity, decent rental rate growth and occupancy during the quarter under review. This is because the company’s properties and its tenants have become indispensable amid the heightening need for effective diagnostics, therapies and vaccines to fight the coronavirus pandemic.
In fact, with higher investments in pharmaceutical research and development as well as critical monetary support from the government and hirings by its tenants, Alexandria’s lab-office assets are anticipated to have enjoyed high demand during the fourth quarter.
Particularly, elevated demand for its Class A properties in AAA locations is likely to have boosted occupancy levels. Ownership of such premium properties in strategic cluster locations is also likely to have driven rent growth during the December-end quarter.
Further, a significant part of the company’s revenues comes in from investment-grade or publicly-traded large-cap tenants. Also, with its campuses being essential and mission-critical for the tenants, rent collections during the to-be-reported quarter is likely to have been solid. These are likely to have aided revenue and net operating income growth for the company during the fourth quarter.
The Zacks Consensus Estimate for the fourth-quarter FFO per share is currently pinned at $1.84, calling for a 3.95% increase from the prior-year period.
However, there is a weakness in demand for spaces from tenants belonging to the technology industry. Nevertheless, the company has a comparatively smaller exposure to this industry.
Amid these, prior to the fourth-quarter earnings release, there is lack of any solid catalyst to be optimistic. Therefore, the Zacks Consensus Estimate for the quarterly FFO per share has remained unchanged over the past month.
The company has guided for 2020 FFO per share in the range of $7.29-$7.31. The Zacks Consensus Estimate for the same has been unrevised at $7.30 in the past month. Nevertheless, the figure indicates a 4.9% increase year over year.
Notably, the company’s current-year guidance is backed by expectations for occupancy in North America in the band of 94.8-95.4%, rental rate increases for lease renewals, and re-leasing of space of 30.5-33.5%, and same-property NOI growth of 1-3%.
Here is what our quantitative model predicts:
Alexandria does not have the right combination of the two key ingredients — a positive Earnings ESP and a 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 Alexandria is -0.09%.
Zacks Rank: Alexandria currently carries a Zacks Rank of 3 (Hold).
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:
Rexford Industrial Realty, Inc. (REXR - Free Report) , slated to release fourth-quarter earnings on Feb 10, has an Earnings ESP of +2.13% and carries a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Healthpeak Properties, Inc. , scheduled to report earnings figures on Feb 9, has an Earnings ESP of +4.40% and holds a Zacks Rank of 3 at present.
Stag Industrial, Inc. (STAG - Free Report) , slated to release quarterly numbers on Feb 10, currently has an Earnings ESP of +2.13% and carries a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>