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Key Factors to Impact Duke Realty (DRE) This Earnings Season
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Duke Realty Corp. is scheduled to report first-quarter 2022 results on Apr 27 after market close. Duke Realty’s results are likely to reflect growth in funds from operations (FFO) per share and revenues from the respective year-ago quarter’s reported figures.
In the last reported quarter, this industrial real estate investment trust (REIT) reported a negative surprise of 2.22% in terms of FFO per share. The quarterly results reflected a decline in revenues.
Over the preceding four quarters, DRE’s FFO per share beat the Zacks Consensus Estimate on two occasions, matched the same once and missed on the other. It has a trailing four-quarter surprise of 1.17%, on average. The graph below depicts this surprise history:
Let’s see how things have shaped up before this announcement.
Factors at Play
The U.S. industrial real estate market is still firing on all cylinders, starting the year with strong demand, which surpassed supply for the sixth consecutive quarter, per a report from Cushman & Wakefield.
There was a net absorption of 108.7 million square feet (msf) of space in the March-end quarter, up 7.8% year over year. The new leasing activity exceeded 200 msf for the sixth quarter in a row.
The U.S. industrial vacancy rate came in at 3.3% at the end of the first quarter of 2022. It is already at an all-time low and marks a decline of 20 basis points (bps) sequentially and 160 bps year over year. Continued tight market conditions, aggressive competition and solid demand aided rent growth during the March-end quarter, which increased by 15.2% year over year to $7.89 per square foot.
Duke Realty is well-poised to bank on the favorable fundamentals of the industrial real estate market due to its solid operating platform and a robust scale. DRE, which enjoys a strong footing in this asset category, is witnessing solid demand for industrial real estate as reflected by the leasing levels of properties.
Moreover, Duke Realty’s expansion efforts through acquisitions and developments in recent years are likely to have boosted the top line during the to-be-reported quarter.
The Zacks Consensus Estimate of $276.9 million for first-quarter revenues indicates growth of 7.3% from the prior-year quarter’s reported number.
However, with the asset category being attractive in the current challenging times, there is a development boom in some markets. Per the CWK report, in the first quarter of 2022, the industrial construction pipeline reached 660.8 msf, denoting the first time when the pipeline surpassed the 600 msf mark.
Moreover, the new supply aggregated 87.2 msf in the quarter, suggesting a 17.1% increase year over year. This high supply is likely to have intensified competition and affected pricing power during the March-end quarter.
Before the quarterly earnings release, there is a lack of any solid catalyst to make investors optimistic about the stock. The Zacks Consensus Estimate for the first quarter’s FFO per share has been unchanged at 44 cents. However, it suggests a 12.8% improvement from the prior-year quarter’s reported number.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict an FFO beat for Duke Realty this time. The right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher —increases the odds of an FFO beat. However, that is not the case here.
Earnings ESP: Duke Realty has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some stocks like Public Storage (PSA - Free Report) , Host Hotels & Resorts, Inc. (HST - Free Report) and Cousins Properties Incorporated (CUZ - Free Report) that 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:
Public Storage, slated to release first-quarter earnings on May 3, has an Earnings ESP of +0.17% and a Zacks Rank of 2 (Buy) at present.
Host Hotels & Resorts, scheduled to report quarterly figures on May 4, has an Earnings ESP of +4.07% and a Zacks Rank of 1 currently.
Cousins Properties Incorporated, slated to report quarterly numbers on Apr 28, has an Earnings ESP of +0.50% and carries a Zacks Rank of 3.
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.
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Key Factors to Impact Duke Realty (DRE) This Earnings Season
Duke Realty Corp. is scheduled to report first-quarter 2022 results on Apr 27 after market close. Duke Realty’s results are likely to reflect growth in funds from operations (FFO) per share and revenues from the respective year-ago quarter’s reported figures.
In the last reported quarter, this industrial real estate investment trust (REIT) reported a negative surprise of 2.22% in terms of FFO per share. The quarterly results reflected a decline in revenues.
Over the preceding four quarters, DRE’s FFO per share beat the Zacks Consensus Estimate on two occasions, matched the same once and missed on the other. It has a trailing four-quarter surprise of 1.17%, on average. The graph below depicts this surprise history:
Duke Realty Corporation Price and EPS Surprise
Duke Realty Corporation price-eps-surprise | Duke Realty Corporation Quote
Let’s see how things have shaped up before this announcement.
Factors at Play
The U.S. industrial real estate market is still firing on all cylinders, starting the year with strong demand, which surpassed supply for the sixth consecutive quarter, per a report from Cushman & Wakefield.
There was a net absorption of 108.7 million square feet (msf) of space in the March-end quarter, up 7.8% year over year. The new leasing activity exceeded 200 msf for the sixth quarter in a row.
The U.S. industrial vacancy rate came in at 3.3% at the end of the first quarter of 2022. It is already at an all-time low and marks a decline of 20 basis points (bps) sequentially and 160 bps year over year. Continued tight market conditions, aggressive competition and solid demand aided rent growth during the March-end quarter, which increased by 15.2% year over year to $7.89 per square foot.
Duke Realty is well-poised to bank on the favorable fundamentals of the industrial real estate market due to its solid operating platform and a robust scale. DRE, which enjoys a strong footing in this asset category, is witnessing solid demand for industrial real estate as reflected by the leasing levels of properties.
Moreover, Duke Realty’s expansion efforts through acquisitions and developments in recent years are likely to have boosted the top line during the to-be-reported quarter.
The Zacks Consensus Estimate of $276.9 million for first-quarter revenues indicates growth of 7.3% from the prior-year quarter’s reported number.
However, with the asset category being attractive in the current challenging times, there is a development boom in some markets. Per the CWK report, in the first quarter of 2022, the industrial construction pipeline reached 660.8 msf, denoting the first time when the pipeline surpassed the 600 msf mark.
Moreover, the new supply aggregated 87.2 msf in the quarter, suggesting a 17.1% increase year over year. This high supply is likely to have intensified competition and affected pricing power during the March-end quarter.
Before the quarterly earnings release, there is a lack of any solid catalyst to make investors optimistic about the stock. The Zacks Consensus Estimate for the first quarter’s FFO per share has been unchanged at 44 cents. However, it suggests a 12.8% improvement from the prior-year quarter’s reported number.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict an FFO beat for Duke Realty this time. The right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher —increases the odds of an FFO beat. However, that is not the case here.
Earnings ESP: Duke Realty has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Duke Realty 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 Public Storage (PSA - Free Report) , Host Hotels & Resorts, Inc. (HST - Free Report) and Cousins Properties Incorporated (CUZ - Free Report) that 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:
Public Storage, slated to release first-quarter earnings on May 3, has an Earnings ESP of +0.17% and a Zacks Rank of 2 (Buy) at present.
Host Hotels & Resorts, scheduled to report quarterly figures on May 4, has an Earnings ESP of +4.07% and a Zacks Rank of 1 currently.
Cousins Properties Incorporated, slated to report quarterly numbers on Apr 28, has an Earnings ESP of +0.50% and carries a Zacks Rank of 3.
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.