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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 third-quarter 2022 results on Nov 3 after market close. The company’s quarterly results are likely to display year-over-year increases in revenues and funds from operations (FFO) per share.
In the last reported quarter, this retail REIT reported a surprise of 10.00% 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 9.10%. 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
Per a report from CBRE Group (CBRE - Free Report) , retail metrics remained positive in the third quarter, given the onset of the holiday season. The core retail sales, excluding gasoline and automobiles, climbed 8.2% from the prior-year period. The overall retail availability rate fell nearly a full percentage point year over year to 5% in the third quarter. The average asking rent increased by 2.5% year over year to $22.55 per square foot in the third quarter.
The absorption of 14.3 million square feet in the third quarter was less than half the level a year ago, but it was 8% higher than the third-quarter 2019 level. Also, new deliveries aggregated 25.1 million square feet over the past 12 months and marked a record low, per the CBRE Group report.
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. Also, a focus on essential retail and mixed-use assets augurs well and ensures steady rental revenue generation.
Therefore, 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 $262.52 million, calling for a 6.2% increase from the year-ago period. The consensus mark for rental revenues is pegged at $261.16 million, suggesting a rise from the year-ago period’s $247.02 million.
Rental income from minimum rents — commercial — is presently pegged at $175.11 million, up from $169.50 in the year-ago period. Rental income from cost reimbursements is projected at $48.20 million, up from $43.26 million in the prior-year period.
Federal Realty’s activities during the soon-to-be-reported quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the third-quarter FFO per share has been revised a cent upward to $1.54 in the past two months. It also suggests 1.99% 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 -0.65%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are two stocks from the broader REIT sector — Host Hotels & Resorts, Inc. (HST - Free Report) and Park Hotels & Resorts Inc. (PK - 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 third-quarter 2022 results on Nov 3 after market close. The company’s quarterly results are likely to display year-over-year increases in revenues and funds from operations (FFO) per share.
In the last reported quarter, this retail REIT reported a surprise of 10.00% 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 9.10%. 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
Per a report from CBRE Group (CBRE - Free Report) , retail metrics remained positive in the third quarter, given the onset of the holiday season. The core retail sales, excluding gasoline and automobiles, climbed 8.2% from the prior-year period. The overall retail availability rate fell nearly a full percentage point year over year to 5% in the third quarter. The average asking rent increased by 2.5% year over year to $22.55 per square foot in the third quarter.
The absorption of 14.3 million square feet in the third quarter was less than half the level a year ago, but it was 8% higher than the third-quarter 2019 level. Also, new deliveries aggregated 25.1 million square feet over the past 12 months and marked a record low, per the CBRE Group report.
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. Also, a focus on essential retail and mixed-use assets augurs well and ensures steady rental revenue generation.
Therefore, 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 $262.52 million, calling for a 6.2% increase from the year-ago period. The consensus mark for rental revenues is pegged at $261.16 million, suggesting a rise from the year-ago period’s $247.02 million.
Rental income from minimum rents — commercial — is presently pegged at $175.11 million, up from $169.50 in the year-ago period. Rental income from cost reimbursements is projected at $48.20 million, up from $43.26 million in the prior-year period.
Federal Realty’s activities during the soon-to-be-reported quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the third-quarter FFO per share has been revised a cent upward to $1.54 in the past two months. It also suggests 1.99% 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 -0.65%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are two stocks from the broader REIT sector — Host Hotels & Resorts, Inc. (HST - Free Report) and Park Hotels & Resorts Inc. (PK - 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.
Host Hotels & Resorts, scheduled to report quarterly numbers on Nov 2, currently has an Earnings ESP of +0.71% and carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Park Hotels & Resorts, slated to release quarterly numbers on Nov 2, has an Earnings ESP of +2.50% and carries a Zacks Rank of 3 at present.
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.