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Why Is Federal Realty Investment Trust (FRT) Up 4% Since Last Earnings Report?

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A month has gone by since the last earnings report for Federal Realty Investment Trust (FRT - Free Report) . Shares have added about 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 Federal Realty Investment Trust 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.

Federal Realty Tops Q1 FFO Estimates, Issues Solid '21 View

Federal Realty’s first-quarter 2021 FFO per share of $1.17 surpassed the Zacks Consensus Estimate of $1.02. Results reflect better-than-anticipated revenues.

Quarterly revenues of $218.2 million topped the consensus mark of $206.3 million. The retail REIT has also issued a solid view for 2021 FFO per share.

According to Donald C. Wood, the company’s chief executive officer,"We saw another quarter of strong leasing demand from a broad base of high-quality tenants with first quarter 2021 leasing over 37% higher than our 10-year first quarter average.”

However, the reported FFO per share decreased from the $1.50 reported in the year-ago quarter. In addition, revenues fell 5.8% year on year in the first quarter, reflecting the adverse impact of the pandemic.

The company noted that while all 101 of its properties are open and operational, roughly 98% of its retail tenants based on annualized base rent were open and operational as of Apr 30, 2021. It has also collected about 90% of total first-quarter 2021 billed recurring rents as of Apr 27, 2021.

Quarter in Details

During the reported quarter, Federal Realty signed 110 leases for 514,636 square feet of retail space. On a comparable space basis, the company leased 506,307 square feet at an average rent of $36.58 per square feet. This denotes cash-basis rollover growth of 9%, 17% on a straight-line basis.

As of Mar 31, 2021, the REIT’s overall portfolio was 91.8% leased. As of the same date, the comparable property portfolio was 91.7% leased.

During the first quarter, Federal Realty sold an 8-acre portion of Graham Park Plaza in Falls Church, VA, for gross proceeds of $20.3 million.

Balance Sheet

Federal Realty exited first-quarter 2021 with cash and cash equivalents of $779.9 million, down from the $798.3 million recorded at the end of 2020. Along with undrawn availability under its $1-billion revolving credit facility, the company’s liquidity amounted to $1.8 billion. Moreover, it has no public bonds maturing until 2023.

Outlook

Federal Realty provided guidance for both 2021 and 2022. For 2021, the company projects FFO per share of $4.54-$4.70. For 2022, the REIT estimates FFO per share of $5.05-$5.25.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

VGM Scores

Currently, Federal Realty Investment Trust has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Federal Realty Investment Trust has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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