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United Dominion (UDR) Up 3.3% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for United Dominion Realty Trust, Inc. (UDR - Free Report) . Shares have added about 3.3% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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.
UDR Meets Q1 FFO Estimates, Beats on Revenues
UDR reported FFO as adjusted per share of $0.45 for first-quarter 2017, matching the Zacks Consensus Estimate. The figure also came higher than the prior-year quarter tally of $0.43.
Total revenue improved 3.8% year over year to $243.8 million. Additionally, it exceeded the Zacks Consensus Estimate of $241.8 million. Growth in revenue from same-store properties and stabilized, non-mature communities attributed to this increase.
In addition, the company reaffirmed its full-year 2017 FFO as adjusted per share and same-store guidance ranges.
Inside the Headlines
During the quarter, same-store revenues increased 4.6% year over year, while same-store expense climbed 3.8%. Consequently, same-store NOI rose 4.9% year over year. The company’s same-store physical occupancy expanded 50 basis points (bps) year over year to 96.8%. The first-quarter annualized rate of turnover contracted 100 bps year over year to 40.8%.
At the end of the first quarter, UDR’s development pipeline aggregated $1.1 billion. This included $279.3 million of completed, non-stabilized projects and $850.6 million of under-construction developments.
As of Mar 31, 2017, the company had around $920 million available, through a combination of cash and undrawn capacity on its credit facilities. Further, the company’s total debt was $3.5 billion as of the same date.
Notably, during the quarter, the company established a $500.0 million unsecured commercial paper program in the U.S. At the end of the quarter, $220.0 million of commercial paper was outstanding on the program at a weighted average rate of 1.24%.
Portfolio Activity
During the quarter, the UDR/MetLife joint venture accomplished the construction on Residences on Jamboree, a 381-home community situated in Irvine, CA, with an estimated cost to construct of $125.0 million at 100%. The company also exercised its fixed-price purchase option to acquire CityLine, a 244-home West Coast Development joint-venture community in suburban Seattle. UDR’s total investment in CityLine amounted to $86.5 million.
Further, the company strengthened its West Coast Development joint-venture relationship through a $15.5 million investment in CityLine II. It is a 155-home development community situated near the recently purchased CityLine in suburban Seattle.
On the other hand, during the quarter, the company sold Hanover Village, a wholly owned parcel of land positioned in Mechanicsville, VA, for total proceeds of $3.5 million.
Guidance
For second-quarter 2017, UDR projects FFO as adjusted per share in the $0.45–$0.47 range.
For full-year 2017, the company projects FFO as adjusted per share in the range of $1.83–$1.87. Moreover, the company anticipates same-store revenue to climb 3.0–4.0%, expenses to increase 2.5–3.5% and same-store NOI growth of 3.25–4.25% for the year.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter.
United Dominion Realty Trust, Inc. Price and Consensus
At this time, United Dominion's stock has an average Growth Score of 'C', however its Momentum is doing a lot better with an 'A'. However, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
While estimates have been trending upward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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United Dominion (UDR) Up 3.3% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for United Dominion Realty Trust, Inc. (UDR - Free Report) . Shares have added about 3.3% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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.
UDR Meets Q1 FFO Estimates, Beats on Revenues
UDR reported FFO as adjusted per share of $0.45 for first-quarter 2017, matching the Zacks Consensus Estimate. The figure also came higher than the prior-year quarter tally of $0.43.
Total revenue improved 3.8% year over year to $243.8 million. Additionally, it exceeded the Zacks Consensus Estimate of $241.8 million. Growth in revenue from same-store properties and stabilized, non-mature communities attributed to this increase.
In addition, the company reaffirmed its full-year 2017 FFO as adjusted per share and same-store guidance ranges.
Inside the Headlines
During the quarter, same-store revenues increased 4.6% year over year, while same-store expense climbed 3.8%. Consequently, same-store NOI rose 4.9% year over year. The company’s same-store physical occupancy expanded 50 basis points (bps) year over year to 96.8%. The first-quarter annualized rate of turnover contracted 100 bps year over year to 40.8%.
At the end of the first quarter, UDR’s development pipeline aggregated $1.1 billion. This included $279.3 million of completed, non-stabilized projects and $850.6 million of under-construction developments.
As of Mar 31, 2017, the company had around $920 million available, through a combination of cash and undrawn capacity on its credit facilities. Further, the company’s total debt was $3.5 billion as of the same date.
Notably, during the quarter, the company established a $500.0 million unsecured commercial paper program in the U.S. At the end of the quarter, $220.0 million of commercial paper was outstanding on the program at a weighted average rate of 1.24%.
Portfolio Activity
During the quarter, the UDR/MetLife joint venture accomplished the construction on Residences on Jamboree, a 381-home community situated in Irvine, CA, with an estimated cost to construct of $125.0 million at 100%. The company also exercised its fixed-price purchase option to acquire CityLine, a 244-home West Coast Development joint-venture community in suburban Seattle. UDR’s total investment in CityLine amounted to $86.5 million.
Further, the company strengthened its West Coast Development joint-venture relationship through a $15.5 million investment in CityLine II. It is a 155-home development community situated near the recently purchased CityLine in suburban Seattle.
On the other hand, during the quarter, the company sold Hanover Village, a wholly owned parcel of land positioned in Mechanicsville, VA, for total proceeds of $3.5 million.
Guidance
For second-quarter 2017, UDR projects FFO as adjusted per share in the $0.45–$0.47 range.
For full-year 2017, the company projects FFO as adjusted per share in the range of $1.83–$1.87. Moreover, the company anticipates same-store revenue to climb 3.0–4.0%, expenses to increase 2.5–3.5% and same-store NOI growth of 3.25–4.25% for the year.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter.
United Dominion Realty Trust, Inc. Price and Consensus
United Dominion Realty Trust, Inc. Price and Consensus | United Dominion Realty Trust, Inc. Quote
VGM Scores
At this time, United Dominion's stock has an average Growth Score of 'C', however its Momentum is doing a lot better with an 'A'. However, the stock was allocated a grade of 'F' on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
While estimates have been trending upward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.