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Alexandria (ARE) to Post Q2 Earnings: What's in the Cards?
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Alexandria Real Estate Equities Inc. (ARE - Free Report) is scheduled to release second-quarter 2024 results on Jul 22, after the closing bell. Its quarterly results are likely to reflect growth in revenues and funds from operations (FFO) per share.
In the last reported quarter, this Pasadena, CA-based life science real estate investment trust (REIT), focusing on collaborative life science, agtech and technology campuses in AAA innovation cluster locations, beat the Zacks Consensus Estimate by 1.73% in terms of adjusted FFO per share. ARE’s performance in the quarter reflected a rise in revenues, aided by decent leasing activity and rental rate growth.
Alexandria has a decent surprise history. Over the preceding four quarters, its adjusted FFO per share surpassed the Zacks Consensus Estimate on three occasions and missed in the remaining period, with the average beat being 1.00%. This is depicted in the graph below:
Alexandria Real Estate Equities, Inc. Price and EPS Surprise
ARE focuses on the development of Class A/A+ properties strategically located within AAA innovation cluster regions. These locations are highly appealing to life science, agtech and technology companies seeking tenancy. In the second quarter, this REIT is expected to continue to benefit from the growing demand for life-science assets amid the increasing need for drug research and innovation.
As a result, ARE is expected to have witnessed healthy leasing and re-leasing activity and high occupancy levels. For the second quarter of 2024, we expect Alexandria’s same-store occupancy to be 95%. Rental income is expected to increase 7.7% on a year-over-year basis in the quarter.
In June 2024, Alexandria clinched a new 10-year lease with a pharmaceutical company for 127,382 rentable square feet at 10075 Barnes Canyon Road on the SD Tech by Alexandria mega campus in the Sorrento Mesa submarket of San Diego.
The Zacks Consensus Estimate for Alexandria’s quarterly revenues currently stands at $776.3 million, suggesting an increase of 8.7% from the prior-year period’s reported figure.
However, ARE’s substantial active development and redevelopment pipeline, although encouraging for long-term growth, exposes it to the risk of rising construction costs and lease-up concerns amid a macroeconomic slowdown.
Also, high interest expenses are likely to have been a spoilsport for Alexandria during the to-be-reported quarter. Elevated rates imply high borrowing costs for the company, affecting its ability to purchase or develop real estate. For the second quarter of 2024, our estimate indicates a significant increase in the company’s interest expenses on a year-over-year basis.
Alexandria’s activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly adjusted FFO per share has remained unrevised at $2.35 over the past month. However, the figure suggests a 4.91% increase from the year-ago quarter’s tally.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict a surprise in terms of FFO per share for Alexandria 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 an FFO beat, which is not the case here.
Alexandria currently has an Earnings ESP of 0.00% and carries a Zacks Rank of 4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two other stocks from the broader REIT sector — Cousins Properties (CUZ - Free Report) and Welltower (WELL - Free Report) — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.
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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Alexandria (ARE) to Post Q2 Earnings: What's in the Cards?
Alexandria Real Estate Equities Inc. (ARE - Free Report) is scheduled to release second-quarter 2024 results on Jul 22, after the closing bell. Its quarterly results are likely to reflect growth in revenues and funds from operations (FFO) per share.
In the last reported quarter, this Pasadena, CA-based life science real estate investment trust (REIT), focusing on collaborative life science, agtech and technology campuses in AAA innovation cluster locations, beat the Zacks Consensus Estimate by 1.73% in terms of adjusted FFO per share. ARE’s performance in the quarter reflected a rise in revenues, aided by decent leasing activity and rental rate growth.
Alexandria has a decent surprise history. Over the preceding four quarters, its adjusted FFO per share surpassed the Zacks Consensus Estimate on three occasions and missed in the remaining period, with the average beat being 1.00%. This is depicted in the graph below:
Alexandria Real Estate Equities, Inc. Price and EPS Surprise
Alexandria Real Estate Equities, Inc. price-eps-surprise | Alexandria Real Estate Equities, Inc. Quote
Factors at Play
ARE focuses on the development of Class A/A+ properties strategically located within AAA innovation cluster regions. These locations are highly appealing to life science, agtech and technology companies seeking tenancy. In the second quarter, this REIT is expected to continue to benefit from the growing demand for life-science assets amid the increasing need for drug research and innovation.
As a result, ARE is expected to have witnessed healthy leasing and re-leasing activity and high occupancy levels. For the second quarter of 2024, we expect Alexandria’s same-store occupancy to be 95%. Rental income is expected to increase 7.7% on a year-over-year basis in the quarter.
In June 2024, Alexandria clinched a new 10-year lease with a pharmaceutical company for 127,382 rentable square feet at 10075 Barnes Canyon Road on the SD Tech by Alexandria mega campus in the Sorrento Mesa submarket of San Diego.
The Zacks Consensus Estimate for Alexandria’s quarterly revenues currently stands at $776.3 million, suggesting an increase of 8.7% from the prior-year period’s reported figure.
However, ARE’s substantial active development and redevelopment pipeline, although encouraging for long-term growth, exposes it to the risk of rising construction costs and lease-up concerns amid a macroeconomic slowdown.
Also, high interest expenses are likely to have been a spoilsport for Alexandria during the to-be-reported quarter. Elevated rates imply high borrowing costs for the company, affecting its ability to purchase or develop real estate. For the second quarter of 2024, our estimate indicates a significant increase in the company’s interest expenses on a year-over-year basis.
Alexandria’s activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly adjusted FFO per share has remained unrevised at $2.35 over the past month. However, the figure suggests a 4.91% increase from the year-ago quarter’s tally.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict a surprise in terms of FFO per share for Alexandria 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 an FFO beat, which is not the case here.
Alexandria currently has an Earnings ESP of 0.00% and carries a Zacks Rank of 4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two other stocks from the broader REIT sector — Cousins Properties (CUZ - Free Report) and Welltower (WELL - Free Report) — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.
Cousins Properties, scheduled to report quarterly numbers on Jul 25, has an Earnings ESP of +0.30% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Welltower, slated to release quarterly numbers on Jul 29, has an Earnings ESP of +0.67% and carries a Zacks Rank of 3 at present.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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.