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PS Business Parks (PSB) Down 2.3% Since Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for PS Business Parks, Inc. . Shares have lost about 2.3% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

PS Business Parks Q3 FFO Beats

PS Business Parks’ third-quarter 2016 adjusted FFO per share was $1.43, beating the Zacks Consensus Estimate by $0.03 and improving 19.2% from $1.20 in the prior-year quarter.

Results reflected a rise in NOI together with lower preferred distributions as well as reduced interest expense.

Total operating revenues came in at around $97.5 million, reflecting 4.3% growth from the prior-year period. The figure also surpassed the Zacks Consensus Estimate of $96 million.

Quarter in Detail

Same Park rental income climbed 3.8% year over year, mainly attributable to improving occupancy and rental rates; while Same Park operating expenses inched up 0.6%. As a result, Same Park NOI rose 5.3% year over year. On the other hand, non-Same Park NOI jumped 44.6% year over year led by an increase in occupancy.

Annualized Same Park realized rent per square foot rose 3.2% year over year to $14.81. Same Park weighted average occupancy in the quarter was 94.1%, up 50 basis points (bps) year over year; while Non-Same Park weighted average occupancy grew to 96.7% from 85.6% a year ago.

Liquidity

PS Business Parks exited third-quarter 2016 with cash and cash equivalents of $5.0 million, lower than the prior-year end tally of $188.9 million. The company had $190.0 million available under its $250-million unsecured credit facility at the end of the third quarter.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, PS Business Parks' stock has a subpar Growth Score of 'D', however its Momentum is doing a lot better with a 'A'. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable solely for momentum based on our styles scores.

Outlook

The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.

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