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DDR View Lowered by Moody's: Fierce E-Commerce Spoils Sport
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Moody's Investors Service, the rating arm of Moody’s Corporation (MCO - Free Report) has downgraded DDR Corp.’s rating outlook from stable to negative. Weakening core shopping center fundamentals of the Beachwood, OH-based retail real estate investment trust (REIT) prompted the rating agency to downgrade the rating.
DDR Corp. is engaged in acquiring, owning, developing, redeveloping, leasing and managing shopping centers, especially in the high-growth areas of the country. Nevertheless, weak fundamentals, including declining same-store net operating income growth, fall in occupancy and tenant bankruptcies resulted in this rating downgrade.
Additionally, DDR Corp. has high leverage with net debt/EBITDA at 7.0x as of first-quarter 2017. Also, more than one third of its debt is scheduled to be due in the next two years. The rating agency believes that the retail environment will continue to be challenging for another year due to increased retailer competition and growth of e-commerce.
In April, DDR Corp. reported first-quarter 2017 funds from operations (FFO) of 30 cents per share, beating the Zacks Consensus Estimate by a penny. However, the number was a cent lower than the prior-year quarter figure. The year over year decline can be attributed to dilutive effect of deleveraging generated through sale of assets.
Shares of DDR Corp. underperformed the Zacks categorized REIT and Equity Trust - Retail industry in the last three months. Shares of the company decreased 37.6%, whereas the industry lost 9.4%.
Currently, DDR Corp. carries a Zacks Rank #3 (Hold), whereas Moody’s has a Zacks Rank #2 (Buy).
In the last 30 days, American Tower Corporation’s FFO per share for second-quarter 2017 increased 1.3% to $1.55.
In the last 30 days, Arbor Realty Trust’s FFO per share for second-quarter 2017 remained unchanged at 19 cents.
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. All EPS numbers presented in this write up represent FFO per share.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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DDR View Lowered by Moody's: Fierce E-Commerce Spoils Sport
Moody's Investors Service, the rating arm of Moody’s Corporation (MCO - Free Report) has downgraded DDR Corp.’s rating outlook from stable to negative. Weakening core shopping center fundamentals of the Beachwood, OH-based retail real estate investment trust (REIT) prompted the rating agency to downgrade the rating.
DDR Corp. is engaged in acquiring, owning, developing, redeveloping, leasing and managing shopping centers, especially in the high-growth areas of the country. Nevertheless, weak fundamentals, including declining same-store net operating income growth, fall in occupancy and tenant bankruptcies resulted in this rating downgrade.
Additionally, DDR Corp. has high leverage with net debt/EBITDA at 7.0x as of first-quarter 2017. Also, more than one third of its debt is scheduled to be due in the next two years. The rating agency believes that the retail environment will continue to be challenging for another year due to increased retailer competition and growth of e-commerce.
In April, DDR Corp. reported first-quarter 2017 funds from operations (FFO) of 30 cents per share, beating the Zacks Consensus Estimate by a penny. However, the number was a cent lower than the prior-year quarter figure. The year over year decline can be attributed to dilutive effect of deleveraging generated through sale of assets.
Shares of DDR Corp. underperformed the Zacks categorized REIT and Equity Trust - Retail industry in the last three months. Shares of the company decreased 37.6%, whereas the industry lost 9.4%.
Currently, DDR Corp. carries a Zacks Rank #3 (Hold), whereas Moody’s has a Zacks Rank #2 (Buy).
Investors interested in the REIT space, may consider stocks like American Tower Corporation (AMT - Free Report) and Arbor Realty Trust, Inc. (ABR - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the last 30 days, American Tower Corporation’s FFO per share for second-quarter 2017 increased 1.3% to $1.55.
In the last 30 days, Arbor Realty Trust’s FFO per share for second-quarter 2017 remained unchanged at 19 cents.
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. All EPS numbers presented in this write up represent FFO per share.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>