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What's in Store for Kimco Realty (KIM) This Earnings Season?
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Kimco Realty Corporation (KIM - Free Report) is slated to report fourth-quarter and full-year 2017 results on Feb 15, before the market opens. The company’s revenues are expected to inch up in the quarter, while funds from operations (FFO) per share will likely remain flat year over year.
Last quarter, this New Hyde Park, NY-based retail real estate investment trust (REIT) delivered better-than-expected results with respect to FFO per share.
Over the trailing four quarters, Kimco beat estimates in one occasion and posted in-line results in the other three, recording an average beat of 0.68%. The graph below depicts this surprise history:
However, the stock has depreciated 25.2% in the past three months versus the industry's loss of 9.7%.
Factors to Influence Q4 Results
Kimco has been taking long strides and is progressing well with its strategic 2020 Vision. In fact, the company has been strategically reducing its portfolio size and channeling the proceeds toward high-quality assets. Further, the company is engaged in the execution of strategic measures to boost the capital structure, and enhance its growth profile and tax efficiency.
Kimco announced fourth-quarter 2017 and full-year 2017 transaction activities. Acquisitions for the fourth quarter totaled $123 million. Moreover, the company’s share from dispositions aggregated $174 million. In 2017, Kimco acquired three shopping centers and 10 land parcels for $382.1 million, out of which, $377.4 million marks the company’s pro-rata share. Disposition activity of the company in the year consisted of 38 shopping centers and three land parcels, for an aggregate gross value of $565.7 million, out of which, the company’s share included $430.4 million.
Also, the holiday season turned out to be blissful for the retailers with upbeat consumer sentiment amid an improving economy, rising income and low unemployment level. Per government data, consumer spending remained robust during this season, with retail sales rising 0.9% and 0.4% in November and December, respectively.
However, the retail real estate market continued to bear the brunt as mall traffic continues to suffer amid a rapid shift in customers’ shopping preference through online channels, resulting in an increasing number of retailers joining the dot-com bandwagon. These have made retailers reconsider their footprint and eventually opt for store closures in recent years, while others unable to cope with competition are filing bankruptcies.
These have emerged as serious concerns for retail REITs, as it is limiting demand for the retail real estate space considerably. Moreover, the choppy retail real estate market situation is said to have led to tenants demanding substantial lease concessions, which mall landlords find unjustified.
Although retail REITs like Kimco are actively enhancing the omni-channel capabilities and heavily investing in redevelopment to draw customers, it may take a while for these efforts to offset the dent created in the operating results.
Furthermore, as part of its portfolio-upgrade strategy, Kimco is aggressively disposing non-core assets. While such efforts are encouraging for the long term, the earnings dilution led by high disposition activity cannot be averted in the near term. Therefore, these moves are expected to hurt the company’s growth momentum in the to-be-reported quarter.
Amid these, the Zacks Consensus Estimate for revenues is pegged at $298.9 million for the quarter under review, reflecting projected growth of 0.6% from the year-ago period.
Kimco’s activities during the quarter could not gain adequate analyst confidence. Consequently, the Zacks Consensus Estimate for FFO per share for the fourth quarter remained unchanged at 38 cents, over the past month. The figure also remains flat compared to the prior-year quarter.
Earnings Whispers
Our proven model does not conclusively show that Kimco will likely beat FFO estimates this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. However, that is not the case here as you will see below.
Zacks ESP: Kimco has an Earnings ESP of +0.16%. This is a meaningful and leading indicator of a positive surprise.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Kimco has a Zacks Rank #4 (Sell), which reduces the predictive power of ESP.
Stocks That Warrant a Look
Here are a few stocks in the REIT space that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this time around:
Extra Space Storage Inc. (EXR - Free Report) , scheduled to report quarterly numbers on Feb 20, has an Earnings ESP of +0.23% and a Zacks Rank of 3.
Outfront Media Inc. (OUT - Free Report) , slated to release quarterly numbers on Feb 27, has an Earnings ESP of +0.90% and a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
What's in Store for Kimco Realty (KIM) This Earnings Season?
Kimco Realty Corporation (KIM - Free Report) is slated to report fourth-quarter and full-year 2017 results on Feb 15, before the market opens. The company’s revenues are expected to inch up in the quarter, while funds from operations (FFO) per share will likely remain flat year over year.
Last quarter, this New Hyde Park, NY-based retail real estate investment trust (REIT) delivered better-than-expected results with respect to FFO per share.
Over the trailing four quarters, Kimco beat estimates in one occasion and posted in-line results in the other three, recording an average beat of 0.68%. The graph below depicts this surprise history:
Kimco Realty Corporation Price and EPS Surprise
Kimco Realty Corporation Price and EPS Surprise | Kimco Realty Corporation Quote
However, the stock has depreciated 25.2% in the past three months versus the industry's loss of 9.7%.
Factors to Influence Q4 Results
Kimco has been taking long strides and is progressing well with its strategic 2020 Vision. In fact, the company has been strategically reducing its portfolio size and channeling the proceeds toward high-quality assets. Further, the company is engaged in the execution of strategic measures to boost the capital structure, and enhance its growth profile and tax efficiency.
Kimco announced fourth-quarter 2017 and full-year 2017 transaction activities. Acquisitions for the fourth quarter totaled $123 million. Moreover, the company’s share from dispositions aggregated $174 million. In 2017, Kimco acquired three shopping centers and 10 land parcels for $382.1 million, out of which, $377.4 million marks the company’s pro-rata share. Disposition activity of the company in the year consisted of 38 shopping centers and three land parcels, for an aggregate gross value of $565.7 million, out of which, the company’s share included $430.4 million.
Also, the holiday season turned out to be blissful for the retailers with upbeat consumer sentiment amid an improving economy, rising income and low unemployment level. Per government data, consumer spending remained robust during this season, with retail sales rising 0.9% and 0.4% in November and December, respectively.
However, the retail real estate market continued to bear the brunt as mall traffic continues to suffer amid a rapid shift in customers’ shopping preference through online channels, resulting in an increasing number of retailers joining the dot-com bandwagon. These have made retailers reconsider their footprint and eventually opt for store closures in recent years, while others unable to cope with competition are filing bankruptcies.
These have emerged as serious concerns for retail REITs, as it is limiting demand for the retail real estate space considerably. Moreover, the choppy retail real estate market situation is said to have led to tenants demanding substantial lease concessions, which mall landlords find unjustified.
Although retail REITs like Kimco are actively enhancing the omni-channel capabilities and heavily investing in redevelopment to draw customers, it may take a while for these efforts to offset the dent created in the operating results.
Furthermore, as part of its portfolio-upgrade strategy, Kimco is aggressively disposing non-core assets. While such efforts are encouraging for the long term, the earnings dilution led by high disposition activity cannot be averted in the near term. Therefore, these moves are expected to hurt the company’s growth momentum in the to-be-reported quarter.
Amid these, the Zacks Consensus Estimate for revenues is pegged at $298.9 million for the quarter under review, reflecting projected growth of 0.6% from the year-ago period.
Kimco’s activities during the quarter could not gain adequate analyst confidence. Consequently, the Zacks Consensus Estimate for FFO per share for the fourth quarter remained unchanged at 38 cents, over the past month. The figure also remains flat compared to the prior-year quarter.
Earnings Whispers
Our proven model does not conclusively show that Kimco will likely beat FFO estimates this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. However, that is not the case here as you will see below.
Zacks ESP: Kimco has an Earnings ESP of +0.16%. This is a meaningful and leading indicator of a positive surprise.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Kimco has a Zacks Rank #4 (Sell), which reduces the predictive power of ESP.
Stocks That Warrant a Look
Here are a few stocks in the REIT space that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this time around:
CubeSmart (CUBE - Free Report) , slated to release fourth-quarter results on Feb 15, has an Earnings ESP of +1.10% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Extra Space Storage Inc. (EXR - Free Report) , scheduled to report quarterly numbers on Feb 20, has an Earnings ESP of +0.23% and a Zacks Rank of 3.
Outfront Media Inc. (OUT - Free Report) , slated to release quarterly numbers on Feb 27, has an Earnings ESP of +0.90% and a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>