Back to top

Image: Bigstock

Strength Seen in Weingarten Realty (WRI): Can Its 12.6% Jump Turn into More Strength?

Read MoreHide Full Article

Weingarten Realty shares soared 12.6% in the last trading session to close at $30.77. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 0.6% gain over the past four weeks.

This increased investor optimism can be attributed to the news of its merger with Kimco Realty (KIM - Free Report) . Each Weingarten shares will be exchanged for 1.408 newly-issued shares of Kimco, plus $2.89 in cash, representing a total consideration of $30.32 per Weingarten share, based on Kimco’s closing stock price on Apr 14.

The combined entity is poised to benefit from enhanced scale, significant presence in major Sun Belt markets, tenant diversity and a deleveraged balance sheet. The transaction is expected to be closed during the second half of 2021. However, considering the fact that the stock is currently trading at $30.77, higher than what Kimco Realty has offered, there is almost no price appreciation potential down the road.

Price and Consensus

Price Consensus Chart for WRI

This real estate investment trust is expected to post quarterly funds from operations (FFO) of $0.41 per share in its upcoming report, which represents a year-over-year change of -6.8%. Revenues are expected to be $103.02 million, down 4.7% from the year-ago quarter.

While FFO and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in FFO estimate revisions and near-term stock price movements.

For Weingarten Realty, the consensus FFO per share estimate for the quarter has been revised 1.4% lower over the last 30 days to the current level. And a negative trend in FFO estimate revisions doesn't usually translate into price appreciation.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Kimco Realty Corporation (KIM) - free report >>

Published in