It has been about a month since the last earnings report for Duke Realty . Shares have lost about 7.8% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Duke Realty due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Duke Realty's Q4 FFO Meets, Revenues Beat Estimates
Duke Realty’s fourth-quarter 2019 core FFO per share of 38 cents came in line with the Zacks Consensus Estimate. Moreover, the bottom line increased 8.6% from the year-ago quarter.
Results indicate overall improved operations and increased investments in building projects. Moreover, strong rent growth drove the company’s same-property NOI.
Rental and related revenues of $217.4 million increased 7.2% on a year-over-year basis. Also, the figure surpassed the Zacks Consensus Estimate of $216.6 million.
In full-year 2019, core FFO per share came in at $1.44, matching the Zacks Consensus Estimate. The figure improved 8.3% year over year. Moreover, rental and related revenues increased 9% to $855.8 million.
Quarter in Detail
Duke Realty leased 8.3 million square feet of space during the December-ended quarter. Tenant retention was 69.2%. Moreover, the company registered same-property NOI cash basis growth of 3.7% year over year. In fact, Duke Realty reported overall cash and annualized net effective rent growth on new and renewal leases of 11.9% and 32.1%, respectively, in the quarter.
As of Dec 31, 2019, the company’s total portfolio, including properties under development, was 94.3% leased, up 40 basis points (bps) from the prior-quarter end, and 50 bps from the prior-year end. In-service portfolio was 96.6% leased as of Dec 31, 2019, up from 96.2% leased on Sep 30, 2019 and from 96.3% on Dec 31, 2018.
Notably, during the fourth quarter, the company started five development projects aggregating 2.6 million square feet, with estimated costs of $307 million. Further, during the quarter, the company acquired two projects worth $68 million, which were fully leased. The company’s building dispositions totaled $110 million in the fourth quarter.
Duke Realty exited fourth-quarter 2019 with $110.9 million of cash and cash equivalents, up from $17.9 million as of Dec 31, 2018.
2020 Guidance
Duke Realty expects its core FFO per share to be in the range of $1.48-$1.54 for 2020. The projection is backed by the company’s efficiency in driving strong rental rate growth as well as lease-up of its new developments at better rental rates.
The company estimates same-property NOI growth to be 3.6-4.4%. The guidance for acquisitions of properties is $100-$300 million. The projection for building dispositions is $300-$500 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Duke Realty has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Duke Realty has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Duke Realty (DRE) Down 7.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Duke Realty . Shares have lost about 7.8% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Duke Realty due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Duke Realty's Q4 FFO Meets, Revenues Beat Estimates
Duke Realty’s fourth-quarter 2019 core FFO per share of 38 cents came in line with the Zacks Consensus Estimate. Moreover, the bottom line increased 8.6% from the year-ago quarter.
Results indicate overall improved operations and increased investments in building projects. Moreover, strong rent growth drove the company’s same-property NOI.
Rental and related revenues of $217.4 million increased 7.2% on a year-over-year basis. Also, the figure surpassed the Zacks Consensus Estimate of $216.6 million.
In full-year 2019, core FFO per share came in at $1.44, matching the Zacks Consensus Estimate. The figure improved 8.3% year over year. Moreover, rental and related revenues increased 9% to $855.8 million.
Quarter in Detail
Duke Realty leased 8.3 million square feet of space during the December-ended quarter. Tenant retention was 69.2%. Moreover, the company registered same-property NOI cash basis growth of 3.7% year over year. In fact, Duke Realty reported overall cash and annualized net effective rent growth on new and renewal leases of 11.9% and 32.1%, respectively, in the quarter.
As of Dec 31, 2019, the company’s total portfolio, including properties under development, was 94.3% leased, up 40 basis points (bps) from the prior-quarter end, and 50 bps from the prior-year end. In-service portfolio was 96.6% leased as of Dec 31, 2019, up from 96.2% leased on Sep 30, 2019 and from 96.3% on Dec 31, 2018.
Notably, during the fourth quarter, the company started five development projects aggregating 2.6 million square feet, with estimated costs of $307 million. Further, during the quarter, the company acquired two projects worth $68 million, which were fully leased. The company’s building dispositions totaled $110 million in the fourth quarter.
Duke Realty exited fourth-quarter 2019 with $110.9 million of cash and cash equivalents, up from $17.9 million as of Dec 31, 2018.
2020 Guidance
Duke Realty expects its core FFO per share to be in the range of $1.48-$1.54 for 2020. The projection is backed by the company’s efficiency in driving strong rental rate growth as well as lease-up of its new developments at better rental rates.
The company estimates same-property NOI growth to be 3.6-4.4%. The guidance for acquisitions of properties is $100-$300 million. The projection for building dispositions is $300-$500 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Duke Realty has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Duke Realty has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.