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What's in Store for Mid-America Apartment (MAA) in Q1 Earnings?
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Mid-America Apartment Communities, Inc. (MAA - Free Report) — commonly known as MAA — is slated to report first-quarter 2022 results on Apr 27 after market close. MAA’s quarterly results are likely to reflect growth in revenues and funds from operations (FFO) per share.
The Germantown, TN-based residential real estate investment trust (REIT) delivered a surprise of 1.60% in terms of FFO per share in the last reported quarter. This residential REIT’s quarterly results were driven by a hike in the average effective rent per unit for the same-store portfolio.
Over the trailing four quarters, MAA surpassed the Zacks Consensus Estimate on all occasions, the average being 2.65%. This is depicted in the chart below:
MidAmerica Apartment Communities, Inc. Price and EPS Surprise
Let’s see how things have shaped up for the announcement.
Factors to Consider
For the U.S. apartment market, the first quarter — typically a slow leasing period in other years — appears to be a solid one this year, with impressive demand for rental units, due to the pandemic that disrupted seasonal behavior.
Per a report from the real estate technology and analytics firm, RealPage, the U.S. apartment market witnessed robust demand, with net demand for market-rate apartments aggregating a whopping 712,899 units nationally in the year ending the first quarter of 2022. This not only marks an 8% increase from the previous high a quarter earlier but also is 76% higher than the pre-pandemic-era highest established back in 2000. There is strong demand from young adults who are gaining from tight labor market conditions and record wage growth.
As a result of the high demand, the apartment occupancy inched up 0.1 percentage point to 97.6% instead of seasonal cooling in the first quarter. Rent growth reached another all-time high, with the new lease effective asking rents increasing 15.2% year over year through March.
With a well-diversified portfolio, MAA is likely to have benefited from this improving trend. The favorable in-migration trends of jobs and households in the Sun Belt submarkets are likely to have spurred demand and hiked the rent for MAA’s communities during the first quarter. Additionally, MAA’s focus on making strategic redevelopments augurs well.
The Zacks Consensus Estimate for quarterly revenues is pegged at $473.3 million, suggesting an 11.4% rise from the year-ago quarter’s reported figure. Same-store revenues are projected at $465 million, indicating an increase from $444 million reported in the prior quarter and $407 million in the year-ago period.
For the first quarter of 2022, MAA projected core FFO per share in the range of $1.83-$1.99.
Before the first-quarter earnings release, the Zacks Consensus Estimate for the quarterly FFO per share has remained unrevised at $1.92 over the past month. However, this calls for year-over-year growth of 17.1%.
The elevated supply might have put pressure on rental rates and affected the revenue growth tempo during the reported quarter.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for MAA 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 an FFO beat. However, that’s not the case here.
Earnings ESP: MAA 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 three stocks from the residential REIT sector — Equity Residential (EQR - Free Report) , Camden Property Trust (CPT - Free Report) and Essex Property Trust, Inc. (ESS - Free Report) — that you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter:
Equity Residential, slated to release first-quarter earnings on Apr 26, has an Earnings ESP of +0.50% and a Zacks Rank of 3 at present.
Camden Property Trust, scheduled to report quarterly figures on Apr 28, has an Earnings ESP of +1.25 % and a Zacks Rank of 2 currently.
Essex Property Trust, slated to report quarterly numbers on Apr 26, has an Earnings ESP of +0.18% 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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What's in Store for Mid-America Apartment (MAA) in Q1 Earnings?
Mid-America Apartment Communities, Inc. (MAA - Free Report) — commonly known as MAA — is slated to report first-quarter 2022 results on Apr 27 after market close. MAA’s quarterly results are likely to reflect growth in revenues and funds from operations (FFO) per share.
The Germantown, TN-based residential real estate investment trust (REIT) delivered a surprise of 1.60% in terms of FFO per share in the last reported quarter. This residential REIT’s quarterly results were driven by a hike in the average effective rent per unit for the same-store portfolio.
Over the trailing four quarters, MAA surpassed the Zacks Consensus Estimate on all occasions, the average being 2.65%. This is depicted in the chart below:
MidAmerica Apartment Communities, Inc. Price and EPS Surprise
MidAmerica Apartment Communities, Inc. price-eps-surprise | MidAmerica Apartment Communities, Inc. Quote
Let’s see how things have shaped up for the announcement.
Factors to Consider
For the U.S. apartment market, the first quarter — typically a slow leasing period in other years — appears to be a solid one this year, with impressive demand for rental units, due to the pandemic that disrupted seasonal behavior.
Per a report from the real estate technology and analytics firm, RealPage, the U.S. apartment market witnessed robust demand, with net demand for market-rate apartments aggregating a whopping 712,899 units nationally in the year ending the first quarter of 2022. This not only marks an 8% increase from the previous high a quarter earlier but also is 76% higher than the pre-pandemic-era highest established back in 2000. There is strong demand from young adults who are gaining from tight labor market conditions and record wage growth.
As a result of the high demand, the apartment occupancy inched up 0.1 percentage point to 97.6% instead of seasonal cooling in the first quarter. Rent growth reached another all-time high, with the new lease effective asking rents increasing 15.2% year over year through March.
With a well-diversified portfolio, MAA is likely to have benefited from this improving trend. The favorable in-migration trends of jobs and households in the Sun Belt submarkets are likely to have spurred demand and hiked the rent for MAA’s communities during the first quarter. Additionally, MAA’s focus on making strategic redevelopments augurs well.
The Zacks Consensus Estimate for quarterly revenues is pegged at $473.3 million, suggesting an 11.4% rise from the year-ago quarter’s reported figure. Same-store revenues are projected at $465 million, indicating an increase from $444 million reported in the prior quarter and $407 million in the year-ago period.
For the first quarter of 2022, MAA projected core FFO per share in the range of $1.83-$1.99.
Before the first-quarter earnings release, the Zacks Consensus Estimate for the quarterly FFO per share has remained unrevised at $1.92 over the past month. However, this calls for year-over-year growth of 17.1%.
The elevated supply might have put pressure on rental rates and affected the revenue growth tempo during the reported quarter.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for MAA 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 an FFO beat. However, that’s not the case here.
Earnings ESP: MAA 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: MAA currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks That Warrant a Look
Here are three stocks from the residential REIT sector — Equity Residential (EQR - Free Report) , Camden Property Trust (CPT - Free Report) and Essex Property Trust, Inc. (ESS - Free Report) — that you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter:
Equity Residential, slated to release first-quarter earnings on Apr 26, has an Earnings ESP of +0.50% and a Zacks Rank of 3 at present.
Camden Property Trust, scheduled to report quarterly figures on Apr 28, has an Earnings ESP of +1.25 % and a Zacks Rank of 2 currently.
Essex Property Trust, slated to report quarterly numbers on Apr 26, has an Earnings ESP of +0.18% 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.