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Factors to Impact Mid-America Apartment's (MAA) Q2 Earnings
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Mid-America Apartment Communities, Inc. (MAA - Free Report) — commonly known as MAA — is slated to report second-quarter 2020 results on Jul 29, after market close. While the company’s results will likely reflect marginal growth in revenues, funds from operations (FFO) per share might display a decline, year over year.
In the last reported quarter, this Germantown, TN-based residential real estate investment trust (REIT) reported a surprise of 1.25% in terms of FFO per share. The quarterly results reflected growth in same-store net operating income (NOI) and rise in average effective rent per unit.
Over the trailing four quarters, the company surpassed the Zacks Consensus Estimate on three occasions, and missed in the other, the average beat being 1.41%. This is depicted in the chart below:
MidAmerica Apartment Communities, Inc. Price and EPS Surprise
Let’s see how things have shaped up for this announcement.
Factors to Consider
The April-June period, which marks the start of the prime leasing season for the U.S. apartment market, was not a favorable one this time, as the pandemic unfavorably impacted the economy and substantial job cuts in the beginning of the quarter affected leasing activity.
Per the latest report from real estate technology and analytics firm RealPage , the second quarter witnessed demand for just 33,966 units across the country’s 150 largest markets. This marks roughly one-fourth of the average apartment product absorption realized in the second quarter in the past five years.
Majority of the demand was seen in June as leasing activity in several locations were limited in the previous months. Moreover, the Sun Belt markets topped the second-quarter apartment demand. However, a number of gateway markets suffered net move-outs during the to-be-reported quarter, and urban core neighborhoods were the worst hit.
Nevertheless, MAA has a well-diversified portfolio in terms of markets, submarkets, product types and price points across the Southeast and Southwest regions of the United States. This is likely to have provided support in generating operating cash flows during the quarter under review. For the past few quarters, MAA has also been focusing on smart-home installations and interior redevelopment initiatives to generate accretive returns and boost earnings from its existing asset base.
However, the pandemic’s impact on the economy and the job market might have marred demand as well as hurt tenants’ rent-paying capabilities.
The Zacks Consensus Estimate for quarterly revenues is pinned at $410.6 million, suggesting a year-over-year improvement of 0.8%.
Prior to the second-quarter earnings release, analysts seem to have become slightly optimistic about the company’s prospects as the Zacks Consensus Estimate for the FFO per share moved two cents north to $1.54. Nevertheless, it suggests a year-over year decline of 1.9%.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for MAA this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
MAA currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%.
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:
SBA Communications Corporation (SBAC - Free Report) , set to report quarterly numbers on Aug 3, currently has an Earnings ESP of +4.48% 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.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Factors to Impact Mid-America Apartment's (MAA) Q2 Earnings
Mid-America Apartment Communities, Inc. (MAA - Free Report) — commonly known as MAA — is slated to report second-quarter 2020 results on Jul 29, after market close. While the company’s results will likely reflect marginal growth in revenues, funds from operations (FFO) per share might display a decline, year over year.
In the last reported quarter, this Germantown, TN-based residential real estate investment trust (REIT) reported a surprise of 1.25% in terms of FFO per share. The quarterly results reflected growth in same-store net operating income (NOI) and rise in average effective rent per unit.
Over the trailing four quarters, the company surpassed the Zacks Consensus Estimate on three occasions, and missed in the other, the average beat being 1.41%. This is depicted in the chart below:
MidAmerica Apartment Communities, Inc. Price and EPS Surprise
MidAmerica Apartment Communities, Inc. price-eps-surprise | MidAmerica Apartment Communities, Inc. Quote
Let’s see how things have shaped up for this announcement.
Factors to Consider
The April-June period, which marks the start of the prime leasing season for the U.S. apartment market, was not a favorable one this time, as the pandemic unfavorably impacted the economy and substantial job cuts in the beginning of the quarter affected leasing activity.
Per the latest report from real estate technology and analytics firm RealPage , the second quarter witnessed demand for just 33,966 units across the country’s 150 largest markets. This marks roughly one-fourth of the average apartment product absorption realized in the second quarter in the past five years.
Majority of the demand was seen in June as leasing activity in several locations were limited in the previous months. Moreover, the Sun Belt markets topped the second-quarter apartment demand. However, a number of gateway markets suffered net move-outs during the to-be-reported quarter, and urban core neighborhoods were the worst hit.
Nevertheless, MAA has a well-diversified portfolio in terms of markets, submarkets, product types and price points across the Southeast and Southwest regions of the United States. This is likely to have provided support in generating operating cash flows during the quarter under review. For the past few quarters, MAA has also been focusing on smart-home installations and interior redevelopment initiatives to generate accretive returns and boost earnings from its existing asset base.
However, the pandemic’s impact on the economy and the job market might have marred demand as well as hurt tenants’ rent-paying capabilities.
The Zacks Consensus Estimate for quarterly revenues is pinned at $410.6 million, suggesting a year-over-year improvement of 0.8%.
Prior to the second-quarter earnings release, analysts seem to have become slightly optimistic about the company’s prospects as the Zacks Consensus Estimate for the FFO per share moved two cents north to $1.54. Nevertheless, it suggests a year-over year decline of 1.9%.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for MAA this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
MAA currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%.
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:
STAG Industrial Inc. (STAG - Free Report) , slated to release second-quarter earnings on Jul 28, has an Earnings ESP of +1.80% and holds a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
SBA Communications Corporation (SBAC - Free Report) , set to report quarterly numbers on Aug 3, currently has an Earnings ESP of +4.48% 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.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>