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Here's How Regency (REG) is Placed Ahead of Q2 Earnings
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Regency Centers Corp. (REG - Free Report) is slated to report second-quarter 2021 results on Aug 5, after the bell. The company’s quarterly results will likely display growth in both revenues and funds from operations (FFO) per share.
In the last reported quarter, this Jacksonville, FL-based retail real estate investment trust (REIT) delivered a surprise of 20% in terms of NAREIT FFO per share. Results reflected higher-than-anticipated revenue numbers.
In the last four quarters, the company exceeded the Zacks Consensus Estimate on two occasions for as many misses. It has a trailing four-quarter negative surprise of 1.06%, on average. This is depicted in the graph below:
Regency Centers Corporation Price and EPS Surprise
Let’s see how things have shaped up prior to this announcement.
Factors to Note
The retail real estate market had already been battling dwindling traffic issues, store closures and retailer bankruptcies, and then the pandemic has only aggravated its woes. However, per a report from CBRE Group (CBRE - Free Report) , amid an improving economy and solid consumer demand, total retail sales jumped 31%, year over year, in the second quarter.
The total retail availability rate shrunk 30 basis points (bps), quarter over quarter, to 6.2%. There have been wide variations in availability rates by markets, with suburban and secondary markets outperforming urban cores. The second-quarter net absorption remained positive for the third straight quarter, highlighting continued demand recovery from the pandemic-induced disruptions.
Moreover, average retail asking rent expanded 20 bps, sequentially, and 10 bps, year over year, to $20.86 per square feet. While retail completions increased 48% quarter over quarter to 7.1 million square feet during the April-June period, the figure is down 10% from the prior year.
Regency too is anticipated to have benefited from the recovery in the retail real estate market. It has a high quality open-air shopping center portfolio with 80% grocery-anchored neighborhood and community centers. The properties are situated in affluent suburban and near urban trade areas where consumers have high spending power, enabling the company to attract top grocers and retailers. Further, in these uncertain times, having a grocery component has been the saving grace for retail REITs, and Regency has numerous industry-leading grocers in its tenant roster.
With focus on necessity, service, convenience, and value retailers, its portfolio comprised 46% of pro-rate annual base rent (ABR) from essential retail and services tenancy as of Mar 31, 2021. Significant essential retail businesses at the company’s centers have enabled its properties to remain open, operating for the entirety of the pandemic.
The vaccination program acceleration and the government stimulus measures have encouragingly brought relief for the retail sector. The economy is improving, and the bounce back in consumer demand is boosting retail sales, which, in turn, is driving demand for the retail real estate space. Pressure on retail landlords might have reduced and the company’s rent-collection figures are anticipated to have improved.
However, the market is witnessing a shift in retail shopping from brick-and-mortar stores to Internet sales, which has only been further aggravated by the pandemic. The recent efforts of online retailers to go deeper into the grocery business have emerged as a concern for this REIT that focuses on building a premium portfolio of grocery-anchored shopping centers, which might have hindered growth to some extent in the second quarter.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $264.8 million, suggesting a year-over-year increase of 14.6%.
Lastly, Regency’s activities during the April-June quarter were adequate to gain analyst confidence. The Zacks Consensus Estimate for the FFO per share moved a cent north in the past month and is currently pinned at 83 cents. The figure also calls for 36.1% growth from the year-earlier period.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a beat in terms of FFO per share for Regency 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.
Regency currently carries a Zacks Rank #2 and has an Earnings ESP of -3.03%.
Performance of Other Retail REITs
Simon Property Group, Inc.’s (SPG - Free Report) second-quarter 2021 adjusted FFO per share of $2.92 handily exceeded the Zacks Consensus Estimate of $2.37. This performance was backed by better-than-expected top-line growth. The retail REIT behemoth also raised the 2021 FFO per share outlook based on its results in the year so far and expectations for the rest of 2021. It also announced a hike in its quarterly dividend.
Kimco Realty Corp.’s (KIM - Free Report) NAREIT FFO per share came in at 34 cents, topping the Zacks Consensus Estimate of 31 cents for the April-June period. This also compared favorably with the year-ago quarter tally of 24 cents. Results displayed better-than-anticipated revenue numbers. Moreover, the retail REIT raised the guidance for 2021 on improved outlook.
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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Here's How Regency (REG) is Placed Ahead of Q2 Earnings
Regency Centers Corp. (REG - Free Report) is slated to report second-quarter 2021 results on Aug 5, after the bell. The company’s quarterly results will likely display growth in both revenues and funds from operations (FFO) per share.
In the last reported quarter, this Jacksonville, FL-based retail real estate investment trust (REIT) delivered a surprise of 20% in terms of NAREIT FFO per share. Results reflected higher-than-anticipated revenue numbers.
In the last four quarters, the company exceeded the Zacks Consensus Estimate on two occasions for as many misses. It has a trailing four-quarter negative surprise of 1.06%, on average. This is depicted in the graph below:
Regency Centers Corporation Price and EPS Surprise
Regency Centers Corporation price-eps-surprise | Regency Centers Corporation Quote
Let’s see how things have shaped up prior to this announcement.
Factors to Note
The retail real estate market had already been battling dwindling traffic issues, store closures and retailer bankruptcies, and then the pandemic has only aggravated its woes. However, per a report from CBRE Group (CBRE - Free Report) , amid an improving economy and solid consumer demand, total retail sales jumped 31%, year over year, in the second quarter.
The total retail availability rate shrunk 30 basis points (bps), quarter over quarter, to 6.2%. There have been wide variations in availability rates by markets, with suburban and secondary markets outperforming urban cores. The second-quarter net absorption remained positive for the third straight quarter, highlighting continued demand recovery from the pandemic-induced disruptions.
Moreover, average retail asking rent expanded 20 bps, sequentially, and 10 bps, year over year, to $20.86 per square feet. While retail completions increased 48% quarter over quarter to 7.1 million square feet during the April-June period, the figure is down 10% from the prior year.
Regency too is anticipated to have benefited from the recovery in the retail real estate market. It has a high quality open-air shopping center portfolio with 80% grocery-anchored neighborhood and community centers. The properties are situated in affluent suburban and near urban trade areas where consumers have high spending power, enabling the company to attract top grocers and retailers. Further, in these uncertain times, having a grocery component has been the saving grace for retail REITs, and Regency has numerous industry-leading grocers in its tenant roster.
With focus on necessity, service, convenience, and value retailers, its portfolio comprised 46% of pro-rate annual base rent (ABR) from essential retail and services tenancy as of Mar 31, 2021. Significant essential retail businesses at the company’s centers have enabled its properties to remain open, operating for the entirety of the pandemic.
The vaccination program acceleration and the government stimulus measures have encouragingly brought relief for the retail sector. The economy is improving, and the bounce back in consumer demand is boosting retail sales, which, in turn, is driving demand for the retail real estate space. Pressure on retail landlords might have reduced and the company’s rent-collection figures are anticipated to have improved.
However, the market is witnessing a shift in retail shopping from brick-and-mortar stores to Internet sales, which has only been further aggravated by the pandemic. The recent efforts of online retailers to go deeper into the grocery business have emerged as a concern for this REIT that focuses on building a premium portfolio of grocery-anchored shopping centers, which might have hindered growth to some extent in the second quarter.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $264.8 million, suggesting a year-over-year increase of 14.6%.
Lastly, Regency’s activities during the April-June quarter were adequate to gain analyst confidence. The Zacks Consensus Estimate for the FFO per share moved a cent north in the past month and is currently pinned at 83 cents. The figure also calls for 36.1% growth from the year-earlier period.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a beat in terms of FFO per share for Regency 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.
Regency currently carries a Zacks Rank #2 and has an Earnings ESP of -3.03%.
Performance of Other Retail REITs
Simon Property Group, Inc.’s (SPG - Free Report) second-quarter 2021 adjusted FFO per share of $2.92 handily exceeded the Zacks Consensus Estimate of $2.37. This performance was backed by better-than-expected top-line growth. The retail REIT behemoth also raised the 2021 FFO per share outlook based on its results in the year so far and expectations for the rest of 2021. It also announced a hike in its quarterly dividend.
Kimco Realty Corp.’s (KIM - Free Report) NAREIT FFO per share came in at 34 cents, topping the Zacks Consensus Estimate of 31 cents for the April-June period. This also compared favorably with the year-ago quarter tally of 24 cents. Results displayed better-than-anticipated revenue numbers. Moreover, the retail REIT raised the guidance for 2021 on improved outlook.
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.