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BP p.l.c. (BP) - free report >>
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Service Properties (SVC) Soars 22.0%: Is Further Upside Left in the Stock?
Service Properties (SVC - Free Report) shares soared 22% in the last trading session to close at $10.52. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5.6% gain over the past four weeks.
Increased optimism in the stock originates from SVC’s recent agreement to amend its existing leases and guarantees with TravelCenters of America Inc. , which will be effective post the completion of the latter’s pending acquisition by BP p.l.c. (BP - Free Report) .
BP will become SVC’s largest tenant post the buyout. Also, Service Properties’ rental income from BP leases is set to be greater than the minimum and percentage rents recognized under the TA leases in 2022, making the move a strategic fit.
This real estate investment trust is expected to post quarterly funds from operations (FFO) of $0.38 per share in its upcoming report, which represents a year-over-year change of +123.5%. Revenues are expected to be $439.08 million, up 4.2% from the year-ago quarter.
While FFO and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in FFO estimate revisions and near-term stock price movements.
For Service Properties, the consensus FFO per share estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in FFO estimate revisions. So, make sure to keep an eye on SVC going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Service Properties is part of the Zacks REIT and Equity Trust - Other industry. Innovative Industrial Properties (IIPR - Free Report) , another stock in the same industry, closed the last trading session 3.3% lower at $87.51. IIPR has returned -18.4% in the past month.
Innovative Industrial Properties' consensus FFO per share estimate for the upcoming report has changed -5.7% over the past month to $1.95. Compared to the company's year-ago FFO per share, this represents a change of +5.4%. Innovative Industrial Properties currently boasts a Zacks Rank of #4 (Sell).