Boston Properties, Inc. (BXP - Free Report) is slated to report third-quarter 2022 results on Oct 25, after market close. Its quarterly results are likely to reflect year-over-year growth in both funds from operations (FFO) per share and revenues.
In the last reported quarter, this office real-estate investment trust (REIT) delivered a surprise of 4.86% in terms of FFO per share. BXP’s performance during the quarter reflected strong leasing activity and bottom-line growth.
Over the preceding four quarters, Boston Properties’ FFO per share surpassed the Zacks Consensus Estimate on each occasion, the average beat being 3.30%. This is depicted in the graph below:
Factors at Play
Per a Cushman & Wakefield (CWK - Free Report) report, the U.S. office market’s overall office absorption continued to be negative even though office-using employment increased in the first three quarters of this year. Notably, on a four-quarter moving average basis, for third-quarter 2022, the U.S. office sector’s overall net absorption improved from negative 26 million square feet (msf) to negative 5.9 msf year over year.
A survey by Cushman & Wakefield shows that the life sciences markets, such as San Jose, San Diego, Suburban MD, Boston, San Mateo County and Northern NJ, are experiencing strong demand for both lab and office space.
Moreover, gross leasing activity has rebounded from its lows in first-quarter 2021. The four-quarter rolling total leasing has increased 45%. Also, third-quarter 2022 marked the third consecutive quarter wherein the four-quarter rolling total leasing was more than 350 msf.
Boston Properties’ portfolio of modern, class A office buildings in Boston, Los Angeles, New York, Seattle, San Francisco and Washington, DC, is likely to have benefited from this upbeat trend.
In addition, with the post-pandemic reopening of the economy, office usage by BXP’s clients is likely to have gained momentum, driving the demand for its premium office assets. This is expected to have aided its third-quarter top-line performance.
Further, BXP’s life-science assets are anticipated to have witnessed solid demand during the quarter to be reported on the back of the growing need for drug research and innovation.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $726.8 million, suggesting growth of nearly 5% from the prior-year quarter’s reading. Also, the consensus estimate for quarterly parking and other revenues is pegged at $26.2 million, implying an 11.6% increase from the year-ago period’s reported number.
The Seattle market has experienced substantial job growth from the technology and life sciences sectors in recent years. Boston Properties is focusing on expanding into this market. In line with this strategy, it disposed of 601 Massachusetts Avenue, NW, Washington, DC, this September to fund the May 2022 acquisition of Madison Center in Seattle’s Downtown area. Such efforts highlight the company’s prudent capital management practices and relieve the pressure off its balance sheet.
However, the prevailing inflationary environment is likely to have had an adverse impact on BXP’s operating activities during the to-be-reported quarter. Also, with interest rates rising, the company’s construction costs for new development projects are anticipated to have increased. In all likelihood, we expect the company to report higher interest expenses in the quarter under preview.
BXP’s activities during the third quarter were not adequate to secure analyst confidence. The Zacks Consensus Estimate for the quarterly FFO per share has been revised marginally downward to $1.87 over the past month. Nonetheless, the same suggests an 8.1% increase from the prior-year period’s reported number.
Earnings Whispers
Our proven model does not conclusively predict an FFO beat for Boston Properties this time. The right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — increases the odds of a beat. However, that is not the case here.
Earnings ESP: Boston Properties has an Earnings ESP of -0.18%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Boston Properties currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks That Warrant a Look
Here are some stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Cousins Properties (CUZ - Free Report) is slated to release third-quarter earnings on Oct 27. CUZ has an Earnings ESP of +1.01% and a Zacks Rank #3 at present.
Public Storage (PSA - Free Report) is scheduled to report quarterly figures on Nov 1. PSA has an Earnings ESP of +1.34% and a Zacks Rank of 3 currently.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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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Boston Properties, Inc. (BXP - Free Report) is slated to report third-quarter 2022 results on Oct 25, after market close. Its quarterly results are likely to reflect year-over-year growth in both funds from operations (FFO) per share and revenues.
In the last reported quarter, this office real-estate investment trust (REIT) delivered a surprise of 4.86% in terms of FFO per share. BXP’s performance during the quarter reflected strong leasing activity and bottom-line growth.
Over the preceding four quarters, Boston Properties’ FFO per share surpassed the Zacks Consensus Estimate on each occasion, the average beat being 3.30%. This is depicted in the graph below:
Factors at Play
Per a Cushman & Wakefield (CWK - Free Report) report, the U.S. office market’s overall office absorption continued to be negative even though office-using employment increased in the first three quarters of this year. Notably, on a four-quarter moving average basis, for third-quarter 2022, the U.S. office sector’s overall net absorption improved from negative 26 million square feet (msf) to negative 5.9 msf year over year.
A survey by Cushman & Wakefield shows that the life sciences markets, such as San Jose, San Diego, Suburban MD, Boston, San Mateo County and Northern NJ, are experiencing strong demand for both lab and office space.
Moreover, gross leasing activity has rebounded from its lows in first-quarter 2021. The four-quarter rolling total leasing has increased 45%. Also, third-quarter 2022 marked the third consecutive quarter wherein the four-quarter rolling total leasing was more than 350 msf.
Boston Properties’ portfolio of modern, class A office buildings in Boston, Los Angeles, New York, Seattle, San Francisco and Washington, DC, is likely to have benefited from this upbeat trend.
In addition, with the post-pandemic reopening of the economy, office usage by BXP’s clients is likely to have gained momentum, driving the demand for its premium office assets. This is expected to have aided its third-quarter top-line performance.
Further, BXP’s life-science assets are anticipated to have witnessed solid demand during the quarter to be reported on the back of the growing need for drug research and innovation.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $726.8 million, suggesting growth of nearly 5% from the prior-year quarter’s reading. Also, the consensus estimate for quarterly parking and other revenues is pegged at $26.2 million, implying an 11.6% increase from the year-ago period’s reported number.
The Seattle market has experienced substantial job growth from the technology and life sciences sectors in recent years. Boston Properties is focusing on expanding into this market. In line with this strategy, it disposed of 601 Massachusetts Avenue, NW, Washington, DC, this September to fund the May 2022 acquisition of Madison Center in Seattle’s Downtown area. Such efforts highlight the company’s prudent capital management practices and relieve the pressure off its balance sheet.
However, the prevailing inflationary environment is likely to have had an adverse impact on BXP’s operating activities during the to-be-reported quarter. Also, with interest rates rising, the company’s construction costs for new development projects are anticipated to have increased. In all likelihood, we expect the company to report higher interest expenses in the quarter under preview.
BXP’s activities during the third quarter were not adequate to secure analyst confidence. The Zacks Consensus Estimate for the quarterly FFO per share has been revised marginally downward to $1.87 over the past month. Nonetheless, the same suggests an 8.1% increase from the prior-year period’s reported number.
Earnings Whispers
Our proven model does not conclusively predict an FFO beat for Boston Properties this time. The right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — increases the odds of a beat. However, that is not the case here.
Earnings ESP: Boston Properties has an Earnings ESP of -0.18%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Boston Properties currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks That Warrant a Look
Here are some stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Cousins Properties (CUZ - Free Report) is slated to release third-quarter earnings on Oct 27. CUZ has an Earnings ESP of +1.01% and a Zacks Rank #3 at present.
Public Storage (PSA - Free Report) is scheduled to report quarterly figures on Nov 1. PSA has an Earnings ESP of +1.34% and a Zacks Rank of 3 currently.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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.
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
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