We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What's in Store for STAG Industrial (STAG) in Q3 Earnings?
Read MoreHide Full Article
STAG Industrial, Inc. (STAG - Free Report) is slated to report third-quarter 2022 earnings on Oct 27 after market close. The company’s quarterly results are likely to reflect growth in revenues and funds from operations (FFO) per share.
In the last reported quarter, this industrial real estate investment trust (REIT) delivered a surprise of 5.66% in terms of FFO per share. Results reflected better-than-expected revenues.
Over the trailing four quarters, STAG Industrial beat estimates on three occasions and missed the same on the other, the average beat being 2.40%. This is depicted in the graph below:
Let’s see how things have shaped up before this announcement.
Factors at Play
Despite economic headwinds and uncertainty and recession woes in the third quarter, U.S. industrial market fundamentals remained strong and steady, per a Cushman & Wakefield (CWK - Free Report) report, with “heightened levels of absorption” and rents scaling new highs.
There was a net absorption of 108.2 million square feet (msf) of space in the September-end quarter, a level consistent with strong demand. It marks the eighth straight quarter where absorption surpassed the 100 msf mark. Moreover, the new leasing activity reached 163.1 msf in the third quarter.
The U.S. industrial vacancy rate remained “tight” at 3.2%, denoting a 20-basis point (bps) quarter-over-quarter uptick. Moreover, each region in the United States once again reported vacancy rates sub-4%, with the lowest being the West region at only 2.5%.
With elevated demand and high occupancy rates, rental rates continued to scale to new heights. The U.S. overall industrial asking rental rate ended the third quarter at $8.70 per square foot, denoting a 4% sequential increase and a 22% annual surge. It marked the strongest year-over-year growth rate recorded, per the CWK report.
STAG Industrial, which focuses on the acquisition, ownership and operation of industrial properties throughout the United States, is also anticipated to have witnessed healthy demand for the fast adoption of e-commerce, with leasing activity getting support in the to-be-reported quarter.
Moreover, with supply chains transforming for faster fulfillment and resilience, STAG is likely to have captured favorable fundamentals. Supply-chain reconfiguration and increases in inventory levels are expected to have acted as tailwinds in the third quarter. Amid this backdrop, vacancy rates are expected to have remained low, while rents are likely to have increased at a healthy rate.
The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $165.6 million, suggesting a 16.5% year-over-year jump.
The Zacks Consensus Estimate for the quarterly FFO per share of 54 cents calls for a 1.9% increase year over year.
However, with the asset category being attractive, there is a development boom in many markets. Per the CWK report, development activity picked up pace in the third quarter, with 148.2 msf of industrial facilities being delivered throughout the United States, the highest quarterly total on record.
Also, the industrial construction pipeline reached another all-time high of 716.9 msf in the third quarter, 2.6% ahead of the previous high a quarter ago. The high supply is likely to have intensified competition during the September-end quarter.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for STAG Industrial this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
STAG Industrial currently carries a Zacks Rank of 3 and 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.
Stocks That Warrant a Look
Here are some stocks from the REIT sector — Extra Space Storage Inc. (EXR - Free Report) , Public Storage (PSA - Free Report) and SBA Communications Corporation (SBAC - 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.
Public Storage, slated to release quarterly numbers on Nov 1, has an Earnings ESP of +1.34% and carries a Zacks Rank of 3 at present.
SBA Communications Corporation, scheduled to report quarterly numbers on Oct 31, currently has an Earnings ESP of +0.44% and carries a Zacks Rank of 3.
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.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
What's in Store for STAG Industrial (STAG) in Q3 Earnings?
STAG Industrial, Inc. (STAG - Free Report) is slated to report third-quarter 2022 earnings on Oct 27 after market close. The company’s quarterly results are likely to reflect growth in revenues and funds from operations (FFO) per share.
In the last reported quarter, this industrial real estate investment trust (REIT) delivered a surprise of 5.66% in terms of FFO per share. Results reflected better-than-expected revenues.
Over the trailing four quarters, STAG Industrial beat estimates on three occasions and missed the same on the other, the average beat being 2.40%. This is depicted in the graph below:
Stag Industrial, Inc. Price and EPS Surprise
Stag Industrial, Inc. price-eps-surprise | Stag Industrial, Inc. Quote
Let’s see how things have shaped up before this announcement.
Factors at Play
Despite economic headwinds and uncertainty and recession woes in the third quarter, U.S. industrial market fundamentals remained strong and steady, per a Cushman & Wakefield (CWK - Free Report) report, with “heightened levels of absorption” and rents scaling new highs.
There was a net absorption of 108.2 million square feet (msf) of space in the September-end quarter, a level consistent with strong demand. It marks the eighth straight quarter where absorption surpassed the 100 msf mark. Moreover, the new leasing activity reached 163.1 msf in the third quarter.
The U.S. industrial vacancy rate remained “tight” at 3.2%, denoting a 20-basis point (bps) quarter-over-quarter uptick. Moreover, each region in the United States once again reported vacancy rates sub-4%, with the lowest being the West region at only 2.5%.
With elevated demand and high occupancy rates, rental rates continued to scale to new heights. The U.S. overall industrial asking rental rate ended the third quarter at $8.70 per square foot, denoting a 4% sequential increase and a 22% annual surge. It marked the strongest year-over-year growth rate recorded, per the CWK report.
STAG Industrial, which focuses on the acquisition, ownership and operation of industrial properties throughout the United States, is also anticipated to have witnessed healthy demand for the fast adoption of e-commerce, with leasing activity getting support in the to-be-reported quarter.
Moreover, with supply chains transforming for faster fulfillment and resilience, STAG is likely to have captured favorable fundamentals. Supply-chain reconfiguration and increases in inventory levels are expected to have acted as tailwinds in the third quarter. Amid this backdrop, vacancy rates are expected to have remained low, while rents are likely to have increased at a healthy rate.
The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $165.6 million, suggesting a 16.5% year-over-year jump.
The Zacks Consensus Estimate for the quarterly FFO per share of 54 cents calls for a 1.9% increase year over year.
However, with the asset category being attractive, there is a development boom in many markets. Per the CWK report, development activity picked up pace in the third quarter, with 148.2 msf of industrial facilities being delivered throughout the United States, the highest quarterly total on record.
Also, the industrial construction pipeline reached another all-time high of 716.9 msf in the third quarter, 2.6% ahead of the previous high a quarter ago. The high supply is likely to have intensified competition during the September-end quarter.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for STAG Industrial this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
STAG Industrial currently carries a Zacks Rank of 3 and 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.
Stocks That Warrant a Look
Here are some stocks from the REIT sector — Extra Space Storage Inc. (EXR - Free Report) , Public Storage (PSA - Free Report) and SBA Communications Corporation (SBAC - 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.
Extra Space Storage, scheduled to report third-quarter earnings on Nov 1, currently has an Earnings ESP of +1.31% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Public Storage, slated to release quarterly numbers on Nov 1, has an Earnings ESP of +1.34% and carries a Zacks Rank of 3 at present.
SBA Communications Corporation, scheduled to report quarterly numbers on Oct 31, currently has an Earnings ESP of +0.44% 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.