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What's in the Cards for STORE Capital (STOR) in Q3 Earnings?

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STORE Capital Corporation (STOR - Free Report) is set to report third-quarter 2022 earnings on Nov 3 before market open. The company’s results are projected to display year-over-year increases in revenues and funds from operations (FFO) per share.

In the last reported quarter, this Scottsdale, AZ-based net-lease REIT delivered a surprise of 5.45% for the FFO per share.

The company has a decent surprise history. It surpassed FFO estimates in each of the trailing four quarters, resulting in an average beat of 4.31%. The graph below depicts the surprise history of the company:

STORE Capital Corporation Price and EPS Surprise

STORE Capital Corporation Price and EPS Surprise

STORE Capital Corporation price-eps-surprise | STORE Capital Corporation Quote

STORE Capital is engaged in the acquisition, investment and management of Single Tenant Operational Real Estate. It has emerged as one of the fastest-growing net-lease REITs. Its customers consist of regional and national companies with a strong track record of growth.

STORE Capital has a diverse investment portfolio. This diversification is likely to have helped STOR enjoy steady rental revenues in the third quarter.

The company is also active on the investment front and capital recycling. Its third-quarter results are likely to reflect the benefits of an increase in the real estate investment portfolio size.

STORE Capital’s direct origination model results in a healthy and active investment pipeline. The company’s focus on service, manufacturing and service-oriented retail industries, which are essential, helps secure steady cash flows.

The Zacks Consensus Estimate for third-quarter rental revenues is currently pegged at $208.13 million, suggesting an increase from $184.08 million in the year-ago period. The consensus mark for interest income on loans and financing stands at $13.18 million, calling for a rise from $12.97 million in the year-ago period.

The company’s quarterly revenues are pegged at $215.15 million, calling for a 16.9% increase from the year-ago reported figure.

The third quarter has been notable for STORE Capital as it announced that it would be acquired by GIC, a global institutional investor in partnership with Oak Street, a Division of Blue Owl, one of the largest net lease investors, in a $14 billion transaction. STOR stockholders will receive $32.25 per share in cash. The transaction is expected to close in the first quarter of 2023, subject to the nod by STORE Capital stockholders and the satisfaction of other customary closing conditions.

STORE Capital’s activities during the July-September period were adequate to secure analysts’ confidence. The consensus estimate for the third-quarter FFO per share has moved a cent north over the past two months to 57 cents. The figure also suggests a 14% increase 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 STORE Capital 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.

STORE Capital currently carries a Zacks Rank #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 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.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Host Hotels & Resorts, Inc. (HST) - free report >>

STORE Capital Corporation (STOR) - free report >>

Park Hotels & Resorts Inc. (PK) - free report >>

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