Shares of Liberty Property Trust crafted a new 52-week high, touching $44.03 in the middle of the trading session on May 7, 2013. The closing price of this office real estate investment trust (REIT) on May 7 was $43.95, representing a solid year-to-date return of 23.4%. The average trading volume of the session was 0.76 million shares.
Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock may not sustain this momentum going forward based on its current estimates revision trends.
Factors to Consider
Better-than-expected first-quarter results – including an earnings surprise of 3.17% and consistent performance of the overall portfolio – as well as strong portfolio repositioning activity were the key growth drivers for Liberty Property.
However, Liberty Property generates a significant amount of revenue from its office portfolio. Office demand is highly correlated to job growth. Given the current economic environment and the volatility in the job market, demands for the Liberty Property’s office portfolio are likely to suffer. This could adversely affect the top-line growth of the company.
On Apr 23, Liberty Property reported first-quarter 2013 FFO (funds from operations) of 65 cents per share, beating the Zacks Consensus Estimate by 2 cents. However, this compared unfavorably with the prior-year quarter figure of 68 cents. The result was attributable to a consistent performance of the overall portfolio as well as strong leasing and development activities. However, an increase in operating expenses acted as a headwind.
Liberty Property has now delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 2.12%.
Over the last 30 days, the Zacks Consensus Estimate for full-year 2013 FFO remained unchanged at $2.65 per share. On the other hand, the Zacks Consensus Estimate for 2014 FFO has moved down 1.4% to $2.75 per share.
On May 7, a number of other REITs also touched 52-week highs. These include DDR Corp. (DDR - Analyst Report), HCP Inc. (HCP - Analyst Report) and Highwoods Properties Inc. (HIW - Analyst Report).
Note: Funds from operations, a widely accepted and reported measure of REITs performance, are derived by adding depreciation, amortization and other non-cash expenses to net income.