A month has gone by since the last earnings report for Duke Realty . Shares have lost about 4.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Duke Realty due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Duke Realty's Q2 FFO & Revenues Top Estimates, View Up
Duke Realty’s second-quarter 2018 core FFO per share of 33 cents came in line with the Zacks Consensus Estimate. Moreover, the figure came in a cent higher than the year-ago tally.
Notably, the company used part of the medical office business (MOB) sale proceeds to reduce debt and interest expense. It also reinvested the proceeds in new industrial properties and for improving overall operations. These measures boosted Duke Realty’s core FFO tally. However, this upside was partly negated by the significant amount contributed by the pre-sale operations of the company’s medical office assets in the previous year.
Total revenues of $210.6 million in the reported quarter jumped 11.2% on a year-over-year basis, handily surpassing the Zacks Consensus Estimate of $196.6 million.
Quarter in Detail
Duke Realty leased around 7.8 million square feet of space in the June-end quarter. Its tenant retention for the quarter was 74.7%. Moreover, it registered same-property net operating income growth of 3.9% year over year. In fact, the company reported overall cash and annualized net effective rent growth related to new and renewal leases of 9.2% and 22.1%, respectively.
As of Jun 30, 2018, the company’s total occupancy, including properties under development, was 94%, down 40 basis points (bps) from the prior-quarter end. In-service occupancy, as of the same date, was 97.4%, up 40 bps from the prior-quarter figure.
Notably, the company initiated development totaling 5.7 million square feet of space, worth $393 million, of which 53% was pre-leased.
Duke Realty exited the second quarter with $86.3 million of cash and cash equivalents, significantly up from $67.6 million as of Dec 31, 2017.
2018 Guidance
Duke Realty raised its 2018 guidance for core FFO per share to $1.29-$1.35, from $1.26-$1.32.
Notably, the company’s guidance is based on faster-than-anticipated leasing of its speculative pipeline and efficient utilization of MOB sale proceeds into new developments.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Duke Realty has a poor Growth Score of F, however its Momentum is doing a lot better with an A. The stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Duke Realty has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Duke Realty (DRE) Down 4.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Duke Realty . Shares have lost about 4.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Duke Realty due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Duke Realty's Q2 FFO & Revenues Top Estimates, View Up
Duke Realty’s second-quarter 2018 core FFO per share of 33 cents came in line with the Zacks Consensus Estimate. Moreover, the figure came in a cent higher than the year-ago tally.
Notably, the company used part of the medical office business (MOB) sale proceeds to reduce debt and interest expense. It also reinvested the proceeds in new industrial properties and for improving overall operations. These measures boosted Duke Realty’s core FFO tally. However, this upside was partly negated by the significant amount contributed by the pre-sale operations of the company’s medical office assets in the previous year.
Total revenues of $210.6 million in the reported quarter jumped 11.2% on a year-over-year basis, handily surpassing the Zacks Consensus Estimate of $196.6 million.
Quarter in Detail
Duke Realty leased around 7.8 million square feet of space in the June-end quarter. Its tenant retention for the quarter was 74.7%. Moreover, it registered same-property net operating income growth of 3.9% year over year. In fact, the company reported overall cash and annualized net effective rent growth related to new and renewal leases of 9.2% and 22.1%, respectively.
As of Jun 30, 2018, the company’s total occupancy, including properties under development, was 94%, down 40 basis points (bps) from the prior-quarter end. In-service occupancy, as of the same date, was 97.4%, up 40 bps from the prior-quarter figure.
Notably, the company initiated development totaling 5.7 million square feet of space, worth $393 million, of which 53% was pre-leased.
Duke Realty exited the second quarter with $86.3 million of cash and cash equivalents, significantly up from $67.6 million as of Dec 31, 2017.
2018 Guidance
Duke Realty raised its 2018 guidance for core FFO per share to $1.29-$1.35, from $1.26-$1.32.
Notably, the company’s guidance is based on faster-than-anticipated leasing of its speculative pipeline and efficient utilization of MOB sale proceeds into new developments.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Duke Realty has a poor Growth Score of F, however its Momentum is doing a lot better with an A. The stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Duke Realty has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.