It has been about a month since the last earnings report for Alexandria Real Estate Equities (ARE Quick QuoteARE - Free Report) . Shares have added about 0.8% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Alexandria Real Estate Equities due for a pullback? 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.

Alexandria’s Q2 FFO Beats, Revenues Rise Y/Y, View Up

Alexandria reported second-quarter 2022 adjusted FFO per share of $2.10, surpassing the Zacks Consensus Estimate of $2.06. The reported figure also compared favorably with the year-ago quarter’s $1.93.

Alexandria witnessed continued healthy leasing activity and rental rate growth during the quarter.

Total revenues in the quarter were $643.8 million, climbing 26.3% from the prior-year quarter’s $509.6 million.

Behind the Headlines

Reflecting robust demand for its high-quality office/laboratory space, Alexandria’s total leasing activity aggregated 2.3 million RSF of space during the second quarter. Lease renewals and re-leasing of space amounted to 1.1 million RSF. The leasing of development and redevelopment space was 0.9 million RSF.

Alexandria registered rental rate growth of 45.4% during the reported quarter. On a cash basis, the rental rate increased 33.9%.

On a year-over-year basis, same-property net operating income (NOI) was up 7.5%. It climbed 10.2% on a cash basis. Occupancy of operating properties in North America remained high at 94.6%.

During second-quarter 2022, investment-grade or publicly-traded large-cap tenants accounted for 50% of the annual rental revenues in effect. Weighted-average remaining lease term of all tenants is 7.1 years. For Alexandria’s top 20 tenants, it is 10.2 years.

As of Jun 30, 2022, the tenant receivables balance was $7.1 million.

During the second quarter, Alexandria completed acquisitions in its key life-science cluster submarkets totaling 1.1 million RSF of future development and redevelopment opportunities for a total price of $280.1 million. Also, Alexandria placed into service development and redevelopment projects totaling 375,394 RSF across multiple submarkets.

During the three months ended Jun 30, 2022, ARE completed partial interest sale and dispositions worth $548.7 million.

Liquidity

Alexandria exited second-quarter 2022 with cash and cash equivalents of $420.3 million, down from $775.1 million as of Mar 31, 2022. It had $5.5 billion of liquidity at the end of the reported quarter.

The net debt and preferred stock to adjusted EBITDA was 5.5X, and the fixed-charge coverage was 5.1X in the second quarter on an annualized basis. As of Jul 25, 2022, ARE had no debt maturities before 2025, and its weighted-average remaining term of debt as of Jun 30, 2022, was 13.6 years.

Raised 2022 Outlook

Alexandria raised its 2022 guidance for adjusted FFO per share by 3 cents at the mid-point, backed by strong same-property performance. It now projects adjusted FFO to lie in the range of $8.38 to $8.44, with the mid-point being $8.41.

ARE also increased the guidance range for same-property NOI growth to 6-8% from 5.9-7.9%. However, it maintained its guidance for occupancy in North America (as of Dec 31, 2022) in the band of 95.2-95.8% and rental rate increases for lease renewals, re-leasing of space of 30-35%.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, Alexandria Real Estate Equities 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

Alexandria Real Estate Equities has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Alexandria Real Estate Equities belongs to the Zacks REIT and Equity Trust - Other industry. Another stock from the same industry, Prologis (PLD Quick QuotePLD - Free Report) , has gained 0.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.

Prologis reported revenues of $1.09 billion in the last reported quarter, representing a year-over-year change of +7.8%. EPS of $0.82 for the same period compares with $1.01 a year ago.

For the current quarter, Prologis is expected to post earnings of $1.76 per share, indicating a change of +69.2% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.4% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Prologis. Also, the stock has a VGM Score of F.