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What's in Store for Federal Realty (FRT) This Earnings Season?
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Federal Realty Investment Trust (FRT - Free Report) is set to report first-quarter 2022 results on May 5 before market open. The company’s quarterly results are likely to display increases in revenues and funds from operations (FFO) per share.
In the last reported quarter, this retail REIT reported a surprise of 4.26% in terms of FFO per share. Results reflected better-than-anticipated revenues.
Over the last four quarters, Federal Realty surpassed estimates on all occasions, the average beat being 14.62%. The graph below depicts the surprise history of the company:
Federal Realty Investment Trust Price and EPS Surprise
Let’s see how things have shaped up before this announcement.
Key Factors
The retail real estate market continued to recover in the first quarter despite its set of challenges, with rising rents and a lower overall availability rate.
Per a report from CBRE Group, total retail sales increased 12.8% year over year to $2 trillion in the first quarter, with in-store retail sales displaying higher growth than e-commerce retail sales. The overall net absorption almost doubled year over year to 32 million square feet in the first quarter, marking the sixth consecutive quarter of positive demand.
Availability is also at its lowest mark in at least a decade. The overall retail availability rate was 5.3% in the March-end quarter, contracting 40 basis points quarter over quarter and 1.2 percentage points year over year. Also, there is tightness in the market, with limited new retail supply. Total construction completions decreased to 5.3 million square feet in the first quarter, which marks the second-lowest quarterly total in the past decade.
The average asking rent improved by 2.2% year over year in the first quarter to $22.17 per square foot, which marks the highest annual rate since the first quarter of 2017.
Federal Realty is anticipated to have benefited from the recovery in the retail real estate market. The company has a portfolio of premium retail assets, mainly situated in major coastal markets from Washington, D.C. to Boston, San Francisco and Los Angeles. FRT strategically selected the first-ring suburbs of major metropolitan markets. Due to strong demographics and the infill nature of its properties, the company has been able to maintain a high occupancy level over the years. Moreover, its focus on the open-air format and “The Pick-Up” concept is likely to have helped the company attract tenants in the first quarter amid the prevailing health crisis.
With widespread vaccination, the resumption of the economy and decent consumer spending, this retail REIT is anticipated to have benefited from its superior assets in premium locations and witnessed an improvement in the leasing environment.
The Zacks Consensus Estimate for quarterly revenues is pegged at $251.8 million, calling for a 15.4% increase from the year-ago period. The consensus mark for rental revenues is pegged at $246 million, suggesting a rise from the year-ago period’s $217 million.
Federal Realty’s activities during the soon-to-be-reported quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the first-quarter FFO per share has been revised 2 cents upward to $1.44 in the past two months. It also suggests 23.1% growth year over year.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for FRT 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.
Federal Realty currently carries a Zacks Rank #3 and has an Earnings ESP of -3.87%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are three stocks from the REIT sector — Simon Property Group (SPG - Free Report) , STORE Capital Corporation and Ventas, Inc. (VTR - 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.
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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What's in Store for Federal Realty (FRT) This Earnings Season?
Federal Realty Investment Trust (FRT - Free Report) is set to report first-quarter 2022 results on May 5 before market open. The company’s quarterly results are likely to display increases in revenues and funds from operations (FFO) per share.
In the last reported quarter, this retail REIT reported a surprise of 4.26% in terms of FFO per share. Results reflected better-than-anticipated revenues.
Over the last four quarters, Federal Realty surpassed estimates on all occasions, the average beat being 14.62%. The graph below depicts the surprise history of the company:
Federal Realty Investment Trust Price and EPS Surprise
Federal Realty Investment Trust price-eps-surprise | Federal Realty Investment Trust Quote
Let’s see how things have shaped up before this announcement.
Key Factors
The retail real estate market continued to recover in the first quarter despite its set of challenges, with rising rents and a lower overall availability rate.
Per a report from CBRE Group, total retail sales increased 12.8% year over year to $2 trillion in the first quarter, with in-store retail sales displaying higher growth than e-commerce retail sales. The overall net absorption almost doubled year over year to 32 million square feet in the first quarter, marking the sixth consecutive quarter of positive demand.
Availability is also at its lowest mark in at least a decade. The overall retail availability rate was 5.3% in the March-end quarter, contracting 40 basis points quarter over quarter and 1.2 percentage points year over year. Also, there is tightness in the market, with limited new retail supply. Total construction completions decreased to 5.3 million square feet in the first quarter, which marks the second-lowest quarterly total in the past decade.
The average asking rent improved by 2.2% year over year in the first quarter to $22.17 per square foot, which marks the highest annual rate since the first quarter of 2017.
Federal Realty is anticipated to have benefited from the recovery in the retail real estate market. The company has a portfolio of premium retail assets, mainly situated in major coastal markets from Washington, D.C. to Boston, San Francisco and Los Angeles. FRT strategically selected the first-ring suburbs of major metropolitan markets. Due to strong demographics and the infill nature of its properties, the company has been able to maintain a high occupancy level over the years. Moreover, its focus on the open-air format and “The Pick-Up” concept is likely to have helped the company attract tenants in the first quarter amid the prevailing health crisis.
With widespread vaccination, the resumption of the economy and decent consumer spending, this retail REIT is anticipated to have benefited from its superior assets in premium locations and witnessed an improvement in the leasing environment.
The Zacks Consensus Estimate for quarterly revenues is pegged at $251.8 million, calling for a 15.4% increase from the year-ago period. The consensus mark for rental revenues is pegged at $246 million, suggesting a rise from the year-ago period’s $217 million.
Federal Realty’s activities during the soon-to-be-reported quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the first-quarter FFO per share has been revised 2 cents upward to $1.44 in the past two months. It also suggests 23.1% growth year over year.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for FRT 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.
Federal Realty currently carries a Zacks Rank #3 and has an Earnings ESP of -3.87%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are three stocks from the REIT sector — Simon Property Group (SPG - Free Report) , STORE Capital Corporation and Ventas, Inc. (VTR - 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.
Simon Property Group, slated to release first-quarter earnings on May 9, has an Earnings ESP of +0.14% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
STORE Capital, scheduled to report quarterly numbers on May 4, has an Earnings ESP of +0.96% and carries a Zacks Rank of 3.
Ventas, slated to report quarterly numbers on May 5, has an Earnings ESP of +1.31% 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 represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.