It has been about a month since the last earnings report for Regency Centers (REG Quick QuoteREG - Free Report) . Shares have lost about 4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Regency Centers due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Regency Centers Q2 FFO Misses Estimates, NOI Slips

Regency’s second-quarter 2020 NAREIT FFO per share of 61 cents missed the Zacks Consensus Estimate of 78 cents. The reported figure was also 35.8% lower than the prior-year quarter’s 95 cents.

Evidently, results reflect a decline in same property net operating income (NOI) because of a higher rate of uncollectible lease income in relation to the coronavirus pandemic.

Further, total revenues of $231.1 million lagged the Zacks Consensus Estimate of $249.3 million. Further, the top line fell 16.2% year on year.

Notably, 415 properties of the company remained open and operational during the entire pandemic. Roughly 95% of Regency’s tenants were open, based on pro-rata ABR as of July-end.

Through Jul 31, 2020, the company collected 72% of second-quarter pro-rata base rent (77% when including executed rent deferral agreements) and 75% of July pro-rata base rent (79% when including executed rent deferral agreements).

Inside the Headlines

During the reported quarter, Regency Centers executed 1.3 million square feet of comparable new and renewal leases with blended rent spreads for the June quarter of 4%.

As of Jun 30, 2020, the company’s wholly-owned portfolio along with its pro-rata shares of co-investment partnerships was 93.9% leased. Its same-property portfolio was 94.5% leased. In its same property portfolio, anchor percent leased (includes spaces greater than or equal to 10,000 square feet) was 96.9%, denoting a slip of 20 basis points (bps) sequentially while same property shop percent leased (includes spaces less than 10,000 square feet) was 90.3%, marking a contraction of 110 bps.

Same-property NOI excluding termination fees plunged 20.1% on a year-over-year basis. Results reflect a higher rate of uncollectible lease income pertaining to the coronavirus pandemic.

Portfolio Activity

During the reported quarter, the company completed the sale of its joint venture interest in Kent Place in Denver, CO for $9.8 million.

As of Jun 30, 2020, the company had $192.3 million of in-process developments and redevelopments with roughly $70 million of remaining costs to complete.

Liquidity Update

As of Jun 30, 2020, Regency had a cash balance of nearly $590 million and no outstanding balance under its $1.25-billion revolving credit facility. Further, the company had a debt-to-EBITDAre ratio of 5.6X as of Jun 30, 2020. It has no unsecured maturities until 2022. During the quarter, the company closed a public offering of $600 million 3.70% unsecured notes due 2030.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Regency Centers has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Regency Centers has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.