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What's in Store for Federal Realty (FRT) This Earnings Season?
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Federal Realty Investment Trust (FRT - Free Report) is set to report third-quarter 2021 results on Nov 4, after the bell. The company’s quarterly results will likely display increases in both revenues and funds from operations (FFO) per share.
In the last reported quarter, this retail real estate investment trust (“REIT”) reported a surprise of 21.55% in terms of FFO per share. Results reflected higher-than-anticipated revenues.
Over the last four quarters, Federal Realty surpassed estimates on all occasions, the average beat being 11.16%. The graph below depicts the surprise history of the company:
Federal Realty Investment Trust Price and EPS Surprise
Let’s see how things have shaped up prior to this announcement.
Key Factors
Per a report from CBRE Group (CBRE - Free Report) , the total retail sales increased 15%, year over year, in the third quarter. The third quarter marked the fourth consecutive quarter of positive retail absorption (+36.7 million square feet) and each asset class marked quarter-over-quarter gains. Also, the average asking rent improved for the third consecutive quarter, increasing 2.9%, year over year, to $21.31 per square feet in the third quarter.
The overall retail availability rate shrunk to a 10-year low of 5.9% in the September-end quarter from the June-end quarter’s 6.2%. New construction deliveries were 6.4 million square feet in the third quarter, down 29% year on year due to material cost increases and sourcing delays.
Federal Realty too is anticipated to have benefited from the recovery in the retail real estate market. The company has a portfolio of premium retail assets, mainly situated in the major coastal markets from Washington, D.C. to Boston, San Francisco and Los Angeles. The company has strategically selected 1st ring suburbs of major metropolitan markets. Due to the strong demographics and infill nature of its properties, the company has been able to maintain a high occupancy level over the years. Moreover, its focus on open-air format and “The Pick-Up” concept are likely to have helped the company attract tenants in the third quarter amid the current health crisis.
Furthermore, with the resumption of the economy, widespread vaccination and solid consumer spending, the retail REIT is anticipated to have benefited from its superior assets in premium locations and witnessed an improving leasing environment.
Also, tenants now stand in a better position to generate revenues and meet their rent payments. Therefore, pressure on retail landlords is likely to have reduced, and the company’s rent-collection figures are anticipated to have improved during the third quarter.
Federal Realty has been capitalizing on expansion opportunities in premium markets, which generates income growth and creates long-term value, and this continued in the third quarter. The retail REIT announced the acquisition of a 100% interest in the Twinbrooke Shopping Centre in Fairfax, VA. It sourced this acquisition off-market for $33.8 million in cash. The acquisition is a strategic fit for the company, given the scope for value creation through remerchandising and capital investment.
The Zacks Consensus Estimate for quarterly revenues is pegged at $229.3 million, calling for a 10.2% increase from the year-ago period. The consensus mark for rental revenues is pegged at $227 million, suggesting a rise from the year-ago period’s $207 million.
Federal Realty’s activities during the soon-to-be-reported quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the third-quarter FFO per share has been revised a cent upward to $1.27 in a month’s time. It also suggests 13.4% growth, year on year.
Here is what our quantitative model predicts:
Our proven model predicts a surprise in terms of FFO per share for Federal Realty this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of a FFO beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Federal Realty currently carries a Zacks Rank of 2 and has an Earnings ESP of +0.49%.
Other 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 too have the right combination of elements to report positive surprises this quarter:
STORE Capital Corporation , scheduled to announce quarterly numbers on Nov 4, currently has an Earnings ESP of +1.02% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Simon Property Group (SPG - Free Report) , set to report quarterly results on Nov 1, has an Earnings ESP of +1.29% and carries a Zacks Rank of 2, at present.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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What's in Store for Federal Realty (FRT) This Earnings Season?
Federal Realty Investment Trust (FRT - Free Report) is set to report third-quarter 2021 results on Nov 4, after the bell. The company’s quarterly results will likely display increases in both revenues and funds from operations (FFO) per share.
In the last reported quarter, this retail real estate investment trust (“REIT”) reported a surprise of 21.55% in terms of FFO per share. Results reflected higher-than-anticipated revenues.
Over the last four quarters, Federal Realty surpassed estimates on all occasions, the average beat being 11.16%. The graph below depicts the surprise history of the company:
Federal Realty Investment Trust Price and EPS Surprise
Federal Realty Investment Trust price-eps-surprise | Federal Realty Investment Trust Quote
Let’s see how things have shaped up prior to this announcement.
Key Factors
Per a report from CBRE Group (CBRE - Free Report) , the total retail sales increased 15%, year over year, in the third quarter. The third quarter marked the fourth consecutive quarter of positive retail absorption (+36.7 million square feet) and each asset class marked quarter-over-quarter gains. Also, the average asking rent improved for the third consecutive quarter, increasing 2.9%, year over year, to $21.31 per square feet in the third quarter.
The overall retail availability rate shrunk to a 10-year low of 5.9% in the September-end quarter from the June-end quarter’s 6.2%. New construction deliveries were 6.4 million square feet in the third quarter, down 29% year on year due to material cost increases and sourcing delays.
Federal Realty too is anticipated to have benefited from the recovery in the retail real estate market. The company has a portfolio of premium retail assets, mainly situated in the major coastal markets from Washington, D.C. to Boston, San Francisco and Los Angeles. The company has strategically selected 1st ring suburbs of major metropolitan markets. Due to the strong demographics and infill nature of its properties, the company has been able to maintain a high occupancy level over the years. Moreover, its focus on open-air format and “The Pick-Up” concept are likely to have helped the company attract tenants in the third quarter amid the current health crisis.
Furthermore, with the resumption of the economy, widespread vaccination and solid consumer spending, the retail REIT is anticipated to have benefited from its superior assets in premium locations and witnessed an improving leasing environment.
Also, tenants now stand in a better position to generate revenues and meet their rent payments. Therefore, pressure on retail landlords is likely to have reduced, and the company’s rent-collection figures are anticipated to have improved during the third quarter.
Federal Realty has been capitalizing on expansion opportunities in premium markets, which generates income growth and creates long-term value, and this continued in the third quarter. The retail REIT announced the acquisition of a 100% interest in the Twinbrooke Shopping Centre in Fairfax, VA. It sourced this acquisition off-market for $33.8 million in cash. The acquisition is a strategic fit for the company, given the scope for value creation through remerchandising and capital investment.
The Zacks Consensus Estimate for quarterly revenues is pegged at $229.3 million, calling for a 10.2% increase from the year-ago period. The consensus mark for rental revenues is pegged at $227 million, suggesting a rise from the year-ago period’s $207 million.
Federal Realty’s activities during the soon-to-be-reported quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the third-quarter FFO per share has been revised a cent upward to $1.27 in a month’s time. It also suggests 13.4% growth, year on year.
Here is what our quantitative model predicts:
Our proven model predicts a surprise in terms of FFO per share for Federal Realty this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of a FFO beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Federal Realty currently carries a Zacks Rank of 2 and has an Earnings ESP of +0.49%.
Other 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 too have the right combination of elements to report positive surprises this quarter:
STORE Capital Corporation , scheduled to announce quarterly numbers on Nov 4, currently has an Earnings ESP of +1.02% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Simon Property Group (SPG - Free Report) , set to report quarterly results on Nov 1, has an Earnings ESP of +1.29% and carries a Zacks Rank of 2, at present.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.