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What's in Store for Alexandria (ARE) This Earnings Season?

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Alexandria Real Estate Equities Inc. (ARE - Free Report) is scheduled to release fourth-quarter and full-year 2021 results on Jan 31, after the closing bell. ARE’s quarterly results are likely to reflect growth in funds from operations (FFO) per share.

In the last reported quarter, this Pasadena, CA-based urban office real estate investment trust (REIT), primarily focused on collaborative life-science and technology campuses, delivered a surprise of 0.52% in terms of FFO per share. Alexandria witnessed continued healthy leasing activity and rental rate growth during the quarter.

Over the preceding four quarters, Alexandria’s FFO per share surpassed the Zacks Consensus Estimate on three occasions and met the mark in the remaining one, the average beat being 1.47%.

Let’s see how things have shaped up prior to this announcement.

Factors at Play

Amid the heightening need for effective diagnostics, therapies and vaccines to fight the ongoing global health crisis, Alexandria’s properties and tenants became indispensable. Its high-quality lab-office assets positioned in key locations are anticipated to have seen solid demand.

Alexandria has Class A properties in AAA locations. With high demand, its ownership of such premium properties at strategic cluster locations is likely to have experienced healthy leasing activity, decent rental rate growth and occupancy during the fourth quarter. Moreover, with substantial part of Alexandria’s revenues coming from investment-grade or publicly-traded large-cap tenants, rent collections in the to-be-reported quarter are likely to have been impressive.

To benefit from the booming agrifoodtech sector, Alexandria’s venture investment platform Alexandria Venture Investments invested in the agricultural and climate-innovative companies during the quarter.

Such efforts are anticipated to have aided revenues and net operating income growth for ARE during the fourth quarter. Also, Alexandria has adequate financial flexibility to cushion and enhance its market position, which is expected to have continued in the quarter under review.

The Zacks Consensus Estimate for the quarterly FFO per share is currently pinned at $1.96, suggesting a 6.52% increase from the prior-year period’s reported figure.

However, ahead of the fourth-quarter earnings release, there is a lack of solid catalysts to make investors grow bullish on the stock. Hence, the Zacks Consensus Estimate for the quarterly FFO per share has been unchanged over the past month.

For the full year, the Zacks Consensus Estimate for FFO per share has been unrevised at $7.76 over the past two months.

Here is what our quantitative model predicts:

Our proven model does not conclusively predict an FFO beat for Alexandria this time around. The right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher —increases the odds of an FFO beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Alexandria has an Earnings ESP of 0.00%.

Zacks Rank: Alexandria currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks That Warrant a Look

Here are some stocks like Medical Properties Trust (MPW - Free Report) , EastGroup Properties (EGP - Free Report) and Highwoods Properties (HIW - Free Report) , which are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:

Medical Properties, slated to release fourth-quarter earnings on Feb 3, has an Earnings ESP of +0.54% and a Zacks Rank of 3 at present.

EastGroup Properties, scheduled to report quarterly figures on Feb 8, has an Earnings ESP of +0.32% and a Zacks Rank of 2, currently.

Highwoods Properties, slated to release fourth-quarter earnings on Feb 8, has an Earnings ESP of +2.67% and a Zacks Rank of 3 at present.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.