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What's in Store for Federal Realty (FRT) in Q1 Earnings?
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Federal Realty Investment Trust (FRT - Free Report) is set to report first-quarter 2018 results after the market closes on May 2. Both its revenues and funds from operations (FFO) are anticipated to experience year-over-year growth.
In the last reported quarter, this retail real estate investment trust (REIT) delivered in-line results with respect to FFO per share. Results reflected growth in revenues. However, the company’s proactive releasing efforts to reposition properties had an adverse effect on its quarterly results.
The company has a decent surprise history with earnings surpassing estimates in three of the trailing four quarters while meeting in one. This resulted in an average positive surprise of 1.37%. The graph below depicts the surprise history of the company:
Federal Realty Investment Trust Price and EPS Surprise
Let’s see how things have shaped up for this announcement.
Factors to Consider
Federal Realty has been taking advantage of the redevelopment opportunities. Amid a fast-evolving retail environment, the company is making strategic efforts to reposition, redevelop and re-merchandise its portfolio. These efforts will help the company to counter competition from e-retailers.
Subsequently, minimum rents from the retail and commercial segment are likely to record sequential growth. The Zacks Consensus Estimate of $153 million indicates marginal growth of 1.3% compared with the prior quarter. Total rental income is projected to be $220 million, which remains stable from the prior-quarter tally.
The Zacks Consensus Estimate for first-quarter revenues is pegged at $223.8 million, indicating a year-over-year improvement of 7.9%.
However, rising consumer purchases through the Internet emerged as a pressing concern for this REIT. These made retailers reconsider their footprints and eventually opt for store closures. Also, retailers, who are not able to cope with competition, are filing for bankruptcies.
Accordingly, percentage rents, which indicate additional rent based on the level of sales achieved by the tenant, are predicted to witness a considerable decline due to the tepid retail environment. The Zacks Consensus Estimate of $3.02 million reflects a 16.6% decline compared with the prior quarter.
Moreover, Federal Realty’s activities during the reported quarter could not gain adequate analyst confidence. Consequently, the Zacks Consensus Estimate for Q1 FFO per share remained stable at $1.50 in a month’s time. However, it indicates rise of 3.5% year-over-year.
Earnings Whispers
Our proven model does not conclusively show that Federal Realty is likely to beat on earnings this season. 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.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for Federal Realty is -0.29%.
Zacks Rank: Federal Realty’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.
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:
Spirit Realty Capital , scheduled to report quarterly numbers on May 1, has an Earnings ESP of +0.49% and a Zacks Rank of 3.
Essex Property Trust (ESS - Free Report) set to report Q1 numbers on May 2, has an Earnings ESP of +0.05% 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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What's in Store for Federal Realty (FRT) in Q1 Earnings?
Federal Realty Investment Trust (FRT - Free Report) is set to report first-quarter 2018 results after the market closes on May 2. Both its revenues and funds from operations (FFO) are anticipated to experience year-over-year growth.
In the last reported quarter, this retail real estate investment trust (REIT) delivered in-line results with respect to FFO per share. Results reflected growth in revenues. However, the company’s proactive releasing efforts to reposition properties had an adverse effect on its quarterly results.
The company has a decent surprise history with earnings surpassing estimates in three of the trailing four quarters while meeting in one. This resulted in an average positive surprise of 1.37%. The graph below depicts the surprise history of the company:
Federal Realty Investment Trust Price and EPS Surprise
Federal Realty Investment Trust Price and EPS Surprise | Federal Realty Investment Trust Quote
Let’s see how things have shaped up for this announcement.
Factors to Consider
Federal Realty has been taking advantage of the redevelopment opportunities. Amid a fast-evolving retail environment, the company is making strategic efforts to reposition, redevelop and re-merchandise its portfolio. These efforts will help the company to counter competition from e-retailers.
Subsequently, minimum rents from the retail and commercial segment are likely to record sequential growth. The Zacks Consensus Estimate of $153 million indicates marginal growth of 1.3% compared with the prior quarter. Total rental income is projected to be $220 million, which remains stable from the prior-quarter tally.
The Zacks Consensus Estimate for first-quarter revenues is pegged at $223.8 million, indicating a year-over-year improvement of 7.9%.
However, rising consumer purchases through the Internet emerged as a pressing concern for this REIT. These made retailers reconsider their footprints and eventually opt for store closures. Also, retailers, who are not able to cope with competition, are filing for bankruptcies.
Accordingly, percentage rents, which indicate additional rent based on the level of sales achieved by the tenant, are predicted to witness a considerable decline due to the tepid retail environment. The Zacks Consensus Estimate of $3.02 million reflects a 16.6% decline compared with the prior quarter.
Moreover, Federal Realty’s activities during the reported quarter could not gain adequate analyst confidence. Consequently, the Zacks Consensus Estimate for Q1 FFO per share remained stable at $1.50 in a month’s time. However, it indicates rise of 3.5% year-over-year.
Earnings Whispers
Our proven model does not conclusively show that Federal Realty is likely to beat on earnings this season. 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.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for Federal Realty is -0.29%.
Zacks Rank: Federal Realty’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.
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:
Amanda Hoffer Properties (AHH - Free Report) , slated to release first-quarter results on May 1, has an Earnings ESP of +0.88% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Spirit Realty Capital , scheduled to report quarterly numbers on May 1, has an Earnings ESP of +0.49% and a Zacks Rank of 3.
Essex Property Trust (ESS - Free Report) set to report Q1 numbers on May 2, has an Earnings ESP of +0.05% 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.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>