We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What's in Store for Boston Properties (BXP) in Q2 Earnings?
Read MoreHide Full Article
Boston Properties, Inc. (BXP - Free Report) is scheduled to report second-quarter 2018 results on Jul 31, after the market closes.
In the last reported quarter, this office REIT delivered an in-line performance in terms of funds from operations (FFO) per share. However, over the trailing four quarters, the company surpassed the Zacks Consensus Estimate in two occasions, met in another and missed in the other. It delivered an average positive surprise of around 0.61% during this period.
Let’s see how things are shaping up for this announcement.
Factors to Influence Q2 Results
Boston Properties, based in Massachusetts, concentrates on a few select high-rent and high barrier-to-entry geographic markets. The company is likely to gain from its solid tenant and industry base, including several bellwethers. Moreover, it is likely to experience solid contribution in 2018 from its non-same-property portfolio, mainly driven by development deliveries.
In addition, with economic improvement and recovery in the job market, we expect healthy growth in demand for office spaces. This is because, as the economy revives, business grows and therefore, corporate sectors seek expansion, renting more space to accommodate the increased workforce.
Going by numbers, per data from CBRE Group (CBRE - Free Report) , in the U.S. office sector for the first time in four quarters, vacancy rate contracted 10 basis points (bps) to 13.0% in Q2. However, there is a slowdown in gross asking rent growth, with a demand-and-supply balance. Average rent inched up 0.4% sequentially and 1.3% year over year.
For Boston Properties too, there is growth in the supply of office space in its markets and this remains a concern because higher supply usually leads to lesser absorption and also curtails landlords’ capability to demand more rents. There is also a trend of increased concessions in some of the markets.
Amid these, the Zacks Consensus Estimate for the base rent of $521 million reflects marginal growth from the prior-quarter figure. However, the Zacks Consensus Estimate for total revenues for the quarter is pegged at $614.4 million, reflecting a projected decline of 6.5% year over year.
While the company anticipates second-quarter 2018 FFO per share of $1.53-$1.55, the Zacks Consensus Estimate for the same is currently pegged at $1.56, indicating a decline of 6.6% from the year-ago quarter. Also, over the last 60 days, this figure has been marginally revised downward.
Earnings Whispers
Our proven model does not conclusively show that Boston Properties is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a bullish Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But 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.
Earnings ESP: Boston Properties has an Earnings ESP of -0.13%.
Zacks Rank: Boston Properties’ Zacks Rank of 3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident about a positive surprise.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Vornado Realty Trust (VNO - Free Report) , scheduled to release quarterly figures on Jul 30, has an Earnings ESP of +3.30% and a Zacks Rank #3.
HCP, Inc. (HCP - Free Report) , set to report Q2 numbers on Aug 2, has an Earnings ESP of +0.66% and carries a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represents 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.
Image: Bigstock
What's in Store for Boston Properties (BXP) in Q2 Earnings?
Boston Properties, Inc. (BXP - Free Report) is scheduled to report second-quarter 2018 results on Jul 31, after the market closes.
In the last reported quarter, this office REIT delivered an in-line performance in terms of funds from operations (FFO) per share. However, over the trailing four quarters, the company surpassed the Zacks Consensus Estimate in two occasions, met in another and missed in the other. It delivered an average positive surprise of around 0.61% during this period.
The graph below depicts this surprise history:
Boston Properties, Inc. Price and EPS Surprise
Boston Properties, Inc. Price and EPS Surprise | Boston Properties, Inc. Quote
Let’s see how things are shaping up for this announcement.
Factors to Influence Q2 Results
Boston Properties, based in Massachusetts, concentrates on a few select high-rent and high barrier-to-entry geographic markets. The company is likely to gain from its solid tenant and industry base, including several bellwethers. Moreover, it is likely to experience solid contribution in 2018 from its non-same-property portfolio, mainly driven by development deliveries.
In addition, with economic improvement and recovery in the job market, we expect healthy growth in demand for office spaces. This is because, as the economy revives, business grows and therefore, corporate sectors seek expansion, renting more space to accommodate the increased workforce.
Going by numbers, per data from CBRE Group (CBRE - Free Report) , in the U.S. office sector for the first time in four quarters, vacancy rate contracted 10 basis points (bps) to 13.0% in Q2. However, there is a slowdown in gross asking rent growth, with a demand-and-supply balance. Average rent inched up 0.4% sequentially and 1.3% year over year.
For Boston Properties too, there is growth in the supply of office space in its markets and this remains a concern because higher supply usually leads to lesser absorption and also curtails landlords’ capability to demand more rents. There is also a trend of increased concessions in some of the markets.
Amid these, the Zacks Consensus Estimate for the base rent of $521 million reflects marginal growth from the prior-quarter figure. However, the Zacks Consensus Estimate for total revenues for the quarter is pegged at $614.4 million, reflecting a projected decline of 6.5% year over year.
While the company anticipates second-quarter 2018 FFO per share of $1.53-$1.55, the Zacks Consensus Estimate for the same is currently pegged at $1.56, indicating a decline of 6.6% from the year-ago quarter. Also, over the last 60 days, this figure has been marginally revised downward.
Earnings Whispers
Our proven model does not conclusively show that Boston Properties is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a bullish Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But 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.
Earnings ESP: Boston Properties has an Earnings ESP of -0.13%.
Zacks Rank: Boston Properties’ Zacks Rank of 3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident about a positive surprise.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Ventas Inc. (VTR - Free Report) , slated to release second-quarter results on Jul 27, has an Earnings ESP of +0.82% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Vornado Realty Trust (VNO - Free Report) , scheduled to release quarterly figures on Jul 30, has an Earnings ESP of +3.30% and a Zacks Rank #3.
HCP, Inc. (HCP - Free Report) , set to report Q2 numbers on Aug 2, has an Earnings ESP of +0.66% and carries a Zacks Rank of 3.
Note: Anything related to earnings presented in this write-up represents 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 >>