A month has gone by since the last earnings report for Regency Centers (REG Quick QuoteREG - Free Report) . Shares have added about 15.4% in that time frame, outperforming the S&P 500.

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

Regency Centers Q4 FFO Beats Estimates, NOI Slips

Regency Centers’ fourth-quarter 2020 NAREIT FFO per share of 76 cents surpassed the Zacks Consensus Estimate of 72 cents. However, the reported figure is lower than the prior-year quarter’s $1.00.

Results reflect a decline in same-property NOI due to a higher rate of uncollectible lease income in relation to the coronavirus pandemic.

Further, total revenues of $258.5 million lagged the Zacks Consensus Estimate of $261.3 million. Moreover, the top line fell 10.5% year on year.

Notably, roughly 97% of Regency Centers’ tenants were open, based on pro-rata Annual Base Rent (ABR) as of the end of January 2021. As of that date, the company had executed rent deferral agreements on more than 1,600 leases, with total deferred rent of $40.8 million. Further, as of Feb 8, 2021, the company collected 92% of fourth quarter pro-rata base rent, in addition to 1% subject to executed deferral agreements. The retail REIT also continues to make progress on the second- and third-quarter receivables.

For 2020, the company reported NAREI FFO per share of $2.95, down from the prior year’s $3.89. Total revenues of $1.02 billion slid 10.3% year on year.

Inside the Headlines

During the fourth quarter, Regency Centers executed 1.7 million square feet of comparable new and renewal leases with blended rent spreads of 0.6%.

As of Dec 31, 2020, the company’s wholly-owned portfolio, along with its pro-rata shares of co-investment partnerships, was 92.3% leased. Its same-property portfolio was 92.9% leased, reflecting a contraction of 60 basis points (bps) sequentially.

In its same-property portfolio, anchor percent leased (includes spaces greater than or equal to 10,000 square feet) was 95.4%, highlighting a contraction of 60 bps sequentially, while same property shop percent leased (includes spaces less than 10,000 square feet) was 88.5%, marking a decrease of 70 bps sequentially.

Same-property NOI excluding termination fees dropped 10.5% on a year-over-year basis. Results reflect a higher rate of uncollectible lease income pertaining to the pandemic.

Portfolio Activity

In the October-December quarter, the company accomplished one development and two redevelopment projects with combined pro-rata costs of $29.8 million. As of Dec 31, 2020, the company had 14 properties in development or redevelopment, with estimated net project costs of $319.3 million and an assessed $170 million of remaining costs to complete.

Moreover, during the quarter, the company sold five shopping centers for a total of $77.8 million at Regency’s share, as well as non-income producing land for a combined gross sales price of $8.1 million at its share.

Liquidity Update

As of Dec 31, 2020, Regency Centers had cash, cash equivalents, and restricted cash of $378.5 million, up from $115.6 million at year-end 2019. The retail REIT had full capacity under its $1.2-billion revolving credit facility. As of that date, its pro-rata net debt-to-operating EBITDAre ratio was 6.0x.

Additionally, following its repayment of the $265-million term loan due January 2022 using cash available in January 2021, the company has no unsecured debt maturities until 2024.

Moreover, Regency announced about its amended and restated unsecured revolving credit facility that closed on Feb 9, 2021. The move, while maintains the size of the facility at $1.25 billion, extends the maturity date to Mar 23, 2025. Also, there are options for Regency to extend the maturity for two additional six-month periods.

Outlook

Regency projects 2021 NAREIT FFO per share in the range of $2.96-$3.14. The company expects same-property NOI change, excluding termination fees, in the range of -1.0% to +2.5%.

Share Repurchase

On Feb 3, the company’s board of directors authorized the buyback by Regency of up to $250 million of its common stock. This authorization is slated to expire on Feb 3, 2023.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months.

VGM Scores

Currently, Regency Centers has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. 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

Regency Centers has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.