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Why Is UDR (UDR) Down 5.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for UDR (UDR - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is UDR due for a breakout? 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 catalysts.
UDR reported second-quarter 2021 FFO as adjusted per share of 49 cents, in line with the Zacks Consensus Estimate. However, the figure is lower than the prior year quarter’s 51 cents.
Driven by the pace of economic recovery, there has been an increase in revenues from rental income, fueling top-line growth. Also, improvement in operating trends as well as strong pricing power and accretive transactions have enabled the company to raise the 2021 guidance.
Quarterly revenues from rental income inched up 1% year over year to $309.1 million. Moreover, the top line surpassed the Zacks Consensus Estimate of $301.1 million.
As of Jul 26, 2021, cash revenues collected for the second quarter of 2021 were 96.4% of total billed revenues.
Per management, “We continue to see sequential improvement in traffic, occupancy, rate growth, and collections in all of our markets”.
Inside the Headlines
In the reported quarter, same-store revenues (with concessions reported on a cash basis) decreased 1% year over year. Same-store expenses flared up 3.8%. Consequently, same-store net operating income, with concessions reported on a cash basis, declined 3.1%.
The residential REIT’s weighted average same-store physical occupancy expanded 80 basis points (bps) sequentially to 97.2%. The second-quarter annualized rate of turnover shrunk 170 bps year over year to 47.5%.
UDR continues to implement its Next Generation Operating Platform strategy. This restricted second-quarter 2021 same-store controllable expense growth to 2% year over year.
Portfolio Activity
The company’s development pipeline aggregated $501.5 million at the end of the reported quarter and 57% of the costs were incurred. The active pipeline includes five development communities for 1,417 homes.
At the end of the second quarter, the company’s Developer Capital Program investment, including accrued return, totaled $297.6 million.
Balance Sheet Activity
As of Jun 30, 2021, UDR had $681.1 million of liquidity through a combination of cash and undrawn capacity under its credit facilities. The total debt was $5.5 billion, as of the same date.
UDR ended the second quarter with fixed-rate debt representing 89.7% of its total debt, a weighted average interest rate of 2.7% and weighted average years to maturity of 7.5 years.
Guidance
The company issued the outlook for third-quarter 2021. It expects FFO as adjusted per share of 49-51 cents.
Further, it expects 2021 FFO as adjusted per share of $1.97-$2.01, up from the previously mentioned $1.94-$2. Additionally, for 2021, it anticipates year-over-year growth in same-store cash revenues of -0.25% to 0.75%, whereas same-store NOI growth is estimated to be -1% to 0.5%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, UDR has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, 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 C. 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, UDR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is UDR (UDR) Down 5.6% Since Last Earnings Report?
It has been about a month since the last earnings report for UDR (UDR - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is UDR due for a breakout? 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 catalysts.
UDR Meets Q2 FFO Estimates, Raises View on Better Operating Trends
UDR reported second-quarter 2021 FFO as adjusted per share of 49 cents, in line with the Zacks Consensus Estimate. However, the figure is lower than the prior year quarter’s 51 cents.
Driven by the pace of economic recovery, there has been an increase in revenues from rental income, fueling top-line growth. Also, improvement in operating trends as well as strong pricing power and accretive transactions have enabled the company to raise the 2021 guidance.
Quarterly revenues from rental income inched up 1% year over year to $309.1 million. Moreover, the top line surpassed the Zacks Consensus Estimate of $301.1 million.
As of Jul 26, 2021, cash revenues collected for the second quarter of 2021 were 96.4% of total billed revenues.
Per management, “We continue to see sequential improvement in traffic, occupancy, rate growth, and collections in all of our markets”.
Inside the Headlines
In the reported quarter, same-store revenues (with concessions reported on a cash basis) decreased 1% year over year. Same-store expenses flared up 3.8%. Consequently, same-store net operating income, with concessions reported on a cash basis, declined 3.1%.
The residential REIT’s weighted average same-store physical occupancy expanded 80 basis points (bps) sequentially to 97.2%. The second-quarter annualized rate of turnover shrunk 170 bps year over year to 47.5%.
UDR continues to implement its Next Generation Operating Platform strategy. This restricted second-quarter 2021 same-store controllable expense growth to 2% year over year.
Portfolio Activity
The company’s development pipeline aggregated $501.5 million at the end of the reported quarter and 57% of the costs were incurred. The active pipeline includes five development communities for 1,417 homes.
At the end of the second quarter, the company’s Developer Capital Program investment, including accrued return, totaled $297.6 million.
Balance Sheet Activity
As of Jun 30, 2021, UDR had $681.1 million of liquidity through a combination of cash and undrawn capacity under its credit facilities. The total debt was $5.5 billion, as of the same date.
UDR ended the second quarter with fixed-rate debt representing 89.7% of its total debt, a weighted average interest rate of 2.7% and weighted average years to maturity of 7.5 years.
Guidance
The company issued the outlook for third-quarter 2021. It expects FFO as adjusted per share of 49-51 cents.
Further, it expects 2021 FFO as adjusted per share of $1.97-$2.01, up from the previously mentioned $1.94-$2. Additionally, for 2021, it anticipates year-over-year growth in same-store cash revenues of -0.25% to 0.75%, whereas same-store NOI growth is estimated to be -1% to 0.5%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, UDR has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, 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 C. 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, UDR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.