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REITs to Watch for Q4 Earnings on Mar 1: PK, HPT & LXP
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Even in this final stretch of the current reporting cycle, results are still pouring in from the real estate investment trust (REIT) space. In fact, on Mar 1, Park Hotels & Resorts Inc. (PK - Free Report) , Hospitality Properties Trust and Lexington Realty Trust (LXP - Free Report) are slated to release their quarterly figures.
The fourth quarter has been subject to a lot of political uncertainty, with the presidential election taking place in November. Further, there had been bond rout amid Trump’s promise of a strong fiscal stimulus. Finally, the much anticipated rate hike did occur in December.
Amid this environment, there were jitters in the industry; but finally when the REITs came out with their quarterly performances, results didn’t turn out to be as dismal as anticipated. In fact, REITs like Boston Properties, Inc. (BXP - Free Report) , Regency Centers Corporation (REG - Free Report) and Host Hotels & Resorts, Inc. (HST - Free Report) delivered positive surprises; while Prologis, Inc. (PLD - Free Report) and Equity Residential (EQR - Free Report) came up with in-line results.
This is because apart from the rate factor, the underlying asset class dynamics as well as location of properties played a vital role in determining the operating performance of REITs. There were several bright spots in the quarter, with the economy and the job market showing signs of recovery.
Particularly, the office and industrial asset categories hogged the limelight for experiencing high demand. In fact, going by numbers, per a study by the commercial real estate services’ firm CBRE Group Inc. , availability fell for 26 straight quarters to 8.2% in the fourth quarter for the U.S. industrial market. Also, the overall office vacancy rate declined 10 basis points (bps) to 12.9%, denoting the lowest level since first-quarter 2008.
However, supply issues in a number of markets have raised concerns for some of the residential REIT stocks, and dwindling mall traffic and store closures amid aggressive growth in online sales have kept retail REITs on tenterhooks.
Therefore, surprises might be in store for some and disappointment for other REITs, this earnings season. However, to predict that, we rely on the Zacks methodology, combining a favorable Zacks Rank – Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) – and a positive Earnings ESP, to predict the chances of a beat this quarter. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Per our proprietary methodology, Earnings ESP shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. Research shows that with this combination of rank and ESP, chances of a positive earnings surprise are as high as 70% for the stocks.
We caution against stocks with Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Let’s have a look at what’s in store for the following REITs expected to release their Q4 results on Mar 1:
Park Hotels & Resorts is a lodging REIT with a wide range of hotels and resorts. Its portfolio includes 67 premium-branded hotels and resorts with more than 35,000 rooms in key domestic and international markets with high barriers to entry.
Presently, Park Hotels has a Zacks Rank #3 and an Earnings ESP of 0.00%. Our proven model does not conclusively show that Park Hotels will beat on earnings this season because it lacks the right combination required for an earnings beat prediction.
Hospitality Properties Trust is another lodging REIT that is engaged in ownership of mainly upscale select service and extended stay hotels, which serve business travelers.
Hospitality Properties Trust currently has a Zacks Rank #3. Despite having a favorable Zacks rank, it becomes difficult to predict an earnings beat this quarter because the stock has an Earnings ESP of 0.00%.You can see the complete list of today’s Zacks #1 Rank stocks here.
The company has delivered positive earnings surprise in three of the trailing four quarters and missed in the other occasion, with an average beat of 3.26%, as demonstrated in the chart below:
Hospitality Properties Trust Price and EPS Surprise
Lexington Realty Trust enjoys ownership of diversified portfolio of real estate assets, which comprise mainly equity and debt investments in single-tenant net-leased commercial properties in the U.S. This Zacks Rank #3 stock has an Earnings ESP of 4.17% and we expect this stock to beat expectations in the to-be-reported quarter.
Notably, Lexington Realty Trust has a decent surprise history and has exceeded estimates in each of the trailing four quarters, with an average beat of 7.48%. This is depicted in the graph below.
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>
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REITs to Watch for Q4 Earnings on Mar 1: PK, HPT & LXP
Even in this final stretch of the current reporting cycle, results are still pouring in from the real estate investment trust (REIT) space. In fact, on Mar 1, Park Hotels & Resorts Inc. (PK - Free Report) , Hospitality Properties Trust and Lexington Realty Trust (LXP - Free Report) are slated to release their quarterly figures.
The fourth quarter has been subject to a lot of political uncertainty, with the presidential election taking place in November. Further, there had been bond rout amid Trump’s promise of a strong fiscal stimulus. Finally, the much anticipated rate hike did occur in December.
Amid this environment, there were jitters in the industry; but finally when the REITs came out with their quarterly performances, results didn’t turn out to be as dismal as anticipated. In fact, REITs like Boston Properties, Inc. (BXP - Free Report) , Regency Centers Corporation (REG - Free Report) and Host Hotels & Resorts, Inc. (HST - Free Report) delivered positive surprises; while Prologis, Inc. (PLD - Free Report) and Equity Residential (EQR - Free Report) came up with in-line results.
This is because apart from the rate factor, the underlying asset class dynamics as well as location of properties played a vital role in determining the operating performance of REITs. There were several bright spots in the quarter, with the economy and the job market showing signs of recovery.
Particularly, the office and industrial asset categories hogged the limelight for experiencing high demand. In fact, going by numbers, per a study by the commercial real estate services’ firm CBRE Group Inc. , availability fell for 26 straight quarters to 8.2% in the fourth quarter for the U.S. industrial market. Also, the overall office vacancy rate declined 10 basis points (bps) to 12.9%, denoting the lowest level since first-quarter 2008.
However, supply issues in a number of markets have raised concerns for some of the residential REIT stocks, and dwindling mall traffic and store closures amid aggressive growth in online sales have kept retail REITs on tenterhooks.
Therefore, surprises might be in store for some and disappointment for other REITs, this earnings season. However, to predict that, we rely on the Zacks methodology, combining a favorable Zacks Rank – Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) – and a positive Earnings ESP, to predict the chances of a beat this quarter. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Per our proprietary methodology, Earnings ESP shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. Research shows that with this combination of rank and ESP, chances of a positive earnings surprise are as high as 70% for the stocks.
We caution against stocks with Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Let’s have a look at what’s in store for the following REITs expected to release their Q4 results on Mar 1:
Park Hotels & Resorts is a lodging REIT with a wide range of hotels and resorts. Its portfolio includes 67 premium-branded hotels and resorts with more than 35,000 rooms in key domestic and international markets with high barriers to entry.
Presently, Park Hotels has a Zacks Rank #3 and an Earnings ESP of 0.00%. Our proven model does not conclusively show that Park Hotels will beat on earnings this season because it lacks the right combination required for an earnings beat prediction.
Hospitality Properties Trust is another lodging REIT that is engaged in ownership of mainly upscale select service and extended stay hotels, which serve business travelers.
Hospitality Properties Trust currently has a Zacks Rank #3. Despite having a favorable Zacks rank, it becomes difficult to predict an earnings beat this quarter because the stock has an Earnings ESP of 0.00%.You can see the complete list of today’s Zacks #1 Rank stocks here.
The company has delivered positive earnings surprise in three of the trailing four quarters and missed in the other occasion, with an average beat of 3.26%, as demonstrated in the chart below:
Hospitality Properties Trust Price and EPS Surprise
Hospitality Properties Trust Price and EPS Surprise | Hospitality Properties Trust Quote
Lexington Realty Trust enjoys ownership of diversified portfolio of real estate assets, which comprise mainly equity and debt investments in single-tenant net-leased commercial properties in the U.S. This Zacks Rank #3 stock has an Earnings ESP of 4.17% and we expect this stock to beat expectations in the to-be-reported quarter.
Notably, Lexington Realty Trust has a decent surprise history and has exceeded estimates in each of the trailing four quarters, with an average beat of 7.48%. This is depicted in the graph below.
Lexington Realty Trust Price and EPS Surprise
Lexington Realty Trust Price and EPS Surprise | Lexington Realty Trust Quote
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>