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What's in Store for W. P. Carey (WPC) This Earnings Season?
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W. P. Carey Inc. (WPC - Free Report) is set to report fourth-quarter and full-year 2020 results on Feb 12, before the market opens. Both its quarterly revenues and funds from operations (FFO) per share might display year-over-year declines.
In the last reported quarter, this New York-based net-lease REIT delivered a positive surprise of 0.88% with respect to FFO per share.
The company has a decent surprise history. It surpassed estimates in each of the preceding four quarters, the average surprise being 2.12%. The graph below depicts the surprise history of the company:
Let’s see how things have shaped up prior to this announcement.
Factors to Consider
This diversified net lease REIT is poised to benefit from its portfolio of operationally-critical commercial real estate, which it leases back to creditworthy tenants on a long-term basis with built-in rent escalators. The company focuses on investing in high-quality single-tenant industrial, warehouse, office, retail and self-storage properties. These properties are located mainly in the United States, and Northern and Western Europe.
Rent collections continued being encouraging in the fourth quarter, with W. P. Carey collecting 99% of December rent due, reflecting its focus on deep credit underwriting and mission-critical assets. Particularly, the company’s rent collections have been robust across the industrial, warehouse, office and self-storage properties with 100% of collections. Rent collection from the retail category is 98%.
Moreover, the company is focused on capitalizing on accretive investment opportunities. Last December, W. P. Carey made industrial investments worth $121 million, bringing the total investment volume for 2020 to around $826 million even amid a tough year that marked a substantial slowdown in transaction activity due to the pandemic.
However, rent collection is lagging in the REIT’s Fitness, Theater and Restaurants portfolio. In addition, the prevailing uncertainty surrounding the pandemic and its impact on economic activity is affecting demand for a number of real estates and W. P. Carey’s portfolio is also not immune to such impacts.
Amid these, the company’s fourth-quarter revenues are pinned at $300.9 million, indicating a 3.3% decline from the prior-year quarter.
W. P. Carey’s activities during the quarter under review were adequate to secure analyst confidence. Consequently, the consensus estimate for quarterly FFO per share has moved 3.5% north to $1.18 in two months’ time. However, it suggests a 7.8% decrease year on year.
For the full year, the Zacks Consensus Estimate for FFO per share has been revised 2.7% upward to $4.88 over the past month. The figure, however, calls for a 2.4% decline year on year. Revenues are projected to be down 3.1% year over year to $1.2 billion.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for W. P. Carey 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.
W. P. Carey currently carries a Zacks Rank #3 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:
Hudson Pacific Properties, Inc. (HPP - Free Report) , slated to release earnings figures on Feb 17, currently has an Earnings ESP of +0.76% and holds a Zacks Rank of 3.
Public Storage (PSA - Free Report) , scheduled to announce fourth-quarter results on Feb 24, has an Earnings ESP of +0.53% and carries a Zacks Rank of 3 at present.
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.
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Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
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What's in Store for W. P. Carey (WPC) This Earnings Season?
W. P. Carey Inc. (WPC - Free Report) is set to report fourth-quarter and full-year 2020 results on Feb 12, before the market opens. Both its quarterly revenues and funds from operations (FFO) per share might display year-over-year declines.
In the last reported quarter, this New York-based net-lease REIT delivered a positive surprise of 0.88% with respect to FFO per share.
The company has a decent surprise history. It surpassed estimates in each of the preceding four quarters, the average surprise being 2.12%. The graph below depicts the surprise history of the company:
W.P. Carey Inc. Price and EPS Surprise
W.P. Carey Inc. price-eps-surprise | W.P. Carey Inc. Quote
Let’s see how things have shaped up prior to this announcement.
Factors to Consider
This diversified net lease REIT is poised to benefit from its portfolio of operationally-critical commercial real estate, which it leases back to creditworthy tenants on a long-term basis with built-in rent escalators. The company focuses on investing in high-quality single-tenant industrial, warehouse, office, retail and self-storage properties. These properties are located mainly in the United States, and Northern and Western Europe.
Rent collections continued being encouraging in the fourth quarter, with W. P. Carey collecting 99% of December rent due, reflecting its focus on deep credit underwriting and mission-critical assets. Particularly, the company’s rent collections have been robust across the industrial, warehouse, office and self-storage properties with 100% of collections. Rent collection from the retail category is 98%.
Moreover, the company is focused on capitalizing on accretive investment opportunities. Last December, W. P. Carey made industrial investments worth $121 million, bringing the total investment volume for 2020 to around $826 million even amid a tough year that marked a substantial slowdown in transaction activity due to the pandemic.
However, rent collection is lagging in the REIT’s Fitness, Theater and Restaurants portfolio. In addition, the prevailing uncertainty surrounding the pandemic and its impact on economic activity is affecting demand for a number of real estates and W. P. Carey’s portfolio is also not immune to such impacts.
Amid these, the company’s fourth-quarter revenues are pinned at $300.9 million, indicating a 3.3% decline from the prior-year quarter.
W. P. Carey’s activities during the quarter under review were adequate to secure analyst confidence. Consequently, the consensus estimate for quarterly FFO per share has moved 3.5% north to $1.18 in two months’ time. However, it suggests a 7.8% decrease year on year.
For the full year, the Zacks Consensus Estimate for FFO per share has been revised 2.7% upward to $4.88 over the past month. The figure, however, calls for a 2.4% decline year on year. Revenues are projected to be down 3.1% year over year to $1.2 billion.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for W. P. Carey 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.
W. P. Carey currently carries a Zacks Rank #3 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:
American Tower Corporation (AMT - Free Report) , set to report quarterly numbers on Feb 25, currently has an Earnings ESP of +7.49% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hudson Pacific Properties, Inc. (HPP - Free Report) , slated to release earnings figures on Feb 17, currently has an Earnings ESP of +0.76% and holds a Zacks Rank of 3.
Public Storage (PSA - Free Report) , scheduled to announce fourth-quarter results on Feb 24, has an Earnings ESP of +0.53% and carries a Zacks Rank of 3 at present.
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.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>