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Is a Beat in Store for Federal Realty (FRT) in Q4 Earnings?
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Federal Realty Investment Trust (FRT - Free Report) is slated to report fourth-quarter and full-year 2022 results on Feb 8 after the closing bell. 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 delivered a surprise of 3.25% in terms of FFO per share. Results reflected better-than-anticipated revenues, aided by healthy leasing activity.
Over the last four quarters, Federal Realty surpassed estimates on all occasions, the average beat being 5.42%. The graph below depicts the surprise history of the company:
Federal Realty Investment Trust Price and EPS Surprise
Per a report from CBRE Group (CBRE - Free Report) , retail real estate markets remained robust in the fourth quarter, with resilient demand driving the retail availability rate to 4.9% after hitting a high of 6.6% in fourth-quarter 2020.
The core retail sales, excluding motor vehicles, gasoline and auto parts, climbed 7.1% from the prior-year period. The non-store retail sales, which include e-commerce, grew 11.3% year over year.
The retail asking rent improved 2.5% year over year for the second consecutive quarter to $22.78 per square foot in the fourth quarter. This was primarily driven by strong demand and limited new supply.
Retail space absorption came in at 12.7 million square feet for fourth-quarter 2022, marking the ninth consecutive quarter of positive retail absorption per the CBRE Group report.
Federal Realty is anticipated to have benefited from the above-mentioned factors.
The increase in consumers’ preference for in-person shopping experiences following the pandemic downtime has been benefiting retail REITs as retailers continue to rent out more physical store spaces to meet this growing demand. This is likely to have driven demand for FRT’s properties, which are strategically located in the first-ring suburbs of the nine major metropolitan markets of the United States, aiding its fourth-quarter cashflows.
Also, the high barriers to entry and strong demographics of these markets, and the infill nature of its properties have allowed FRT to maintain high levels of occupancy.
FRT’s well-diversified tenant base of retailers is expected to have led to steady rental revenue generation during the fourth quarter. Further, its efforts to explore the mixed-use development option, which has gained immense popularity in recent years, is anticipated to have enabled it to tap the growth opportunities in areas where people prefer to live, work and play.
The company’s top line is expected to have improved amid these tailwinds. The Zacks Consensus Estimate for quarterly revenues is pegged at $276.26 million, implying an 8.7% increase from the figure reported a year ago.
The consensus mark for revenues from rental income is pegged at $275.75 million, suggesting an 8.7% rise from the figure reported in the prior-year period. Rental income from minimum rents — commercial — stands at $174.67 million, up from $170.86 million reported in the year-ago period. Rental income from cost reimbursements is projected at $51.48 million, up from $47.69 million reported in the prior-year quarter.
Federal Realty’s solid balance-sheet position is likely to have supported its acquisition and development activities during the fourth quarter.
The company’s activities during the to-be-reported quarter were adequate to garner analysts’ confidence. The Zacks Consensus Estimate for the fourth-quarter FFO per share has been revised a penny upward to $1.57 in the past month. Moreover, it implies 6.8% growth year over year.
For 2022, Federal Realty projected FFO per share in the range of $6.27-$6.32.
For the full year, the Zacks Consensus Estimate for FFO per share has moved marginally northward to $6.30 over the past month. The figure indicates a 13.1% increase year over year on revenues of $1.07 billion.
Earning Whispers
Our proven model predicts a surprise in terms of FFO per share for FRT this season. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — increases the odds of a beat.
Earnings ESP: Federal Realty has an Earnings ESP of +0.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Regency Centers (REG - Free Report) is slated to report quarterly numbers on Feb 9. REG has an Earnings ESP of +0.47% and carries a Zacks Rank of 3.
Stag Industrial (STAG - Free Report) is scheduled to report quarterly figures on Feb 15. STAG has an Earnings ESP of +2.89% and a Zacks Rank #2 (Buy) currently.
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Is a Beat in Store for Federal Realty (FRT) in Q4 Earnings?
Federal Realty Investment Trust (FRT - Free Report) is slated to report fourth-quarter and full-year 2022 results on Feb 8 after the closing bell. 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 delivered a surprise of 3.25% in terms of FFO per share. Results reflected better-than-anticipated revenues, aided by healthy leasing activity.
Over the last four quarters, Federal Realty surpassed estimates on all occasions, the average beat being 5.42%. 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
Factors at Play
Per a report from CBRE Group (CBRE - Free Report) , retail real estate markets remained robust in the fourth quarter, with resilient demand driving the retail availability rate to 4.9% after hitting a high of 6.6% in fourth-quarter 2020.
The core retail sales, excluding motor vehicles, gasoline and auto parts, climbed 7.1% from the prior-year period. The non-store retail sales, which include e-commerce, grew 11.3% year over year.
The retail asking rent improved 2.5% year over year for the second consecutive quarter to $22.78 per square foot in the fourth quarter. This was primarily driven by strong demand and limited new supply.
Retail space absorption came in at 12.7 million square feet for fourth-quarter 2022, marking the ninth consecutive quarter of positive retail absorption per the CBRE Group report.
Federal Realty is anticipated to have benefited from the above-mentioned factors.
The increase in consumers’ preference for in-person shopping experiences following the pandemic downtime has been benefiting retail REITs as retailers continue to rent out more physical store spaces to meet this growing demand. This is likely to have driven demand for FRT’s properties, which are strategically located in the first-ring suburbs of the nine major metropolitan markets of the United States, aiding its fourth-quarter cashflows.
Also, the high barriers to entry and strong demographics of these markets, and the infill nature of its properties have allowed FRT to maintain high levels of occupancy.
FRT’s well-diversified tenant base of retailers is expected to have led to steady rental revenue generation during the fourth quarter. Further, its efforts to explore the mixed-use development option, which has gained immense popularity in recent years, is anticipated to have enabled it to tap the growth opportunities in areas where people prefer to live, work and play.
The company’s top line is expected to have improved amid these tailwinds. The Zacks Consensus Estimate for quarterly revenues is pegged at $276.26 million, implying an 8.7% increase from the figure reported a year ago.
The consensus mark for revenues from rental income is pegged at $275.75 million, suggesting an 8.7% rise from the figure reported in the prior-year period. Rental income from minimum rents — commercial — stands at $174.67 million, up from $170.86 million reported in the year-ago period. Rental income from cost reimbursements is projected at $51.48 million, up from $47.69 million reported in the prior-year quarter.
Federal Realty’s solid balance-sheet position is likely to have supported its acquisition and development activities during the fourth quarter.
The company’s activities during the to-be-reported quarter were adequate to garner analysts’ confidence. The Zacks Consensus Estimate for the fourth-quarter FFO per share has been revised a penny upward to $1.57 in the past month. Moreover, it implies 6.8% growth year over year.
For 2022, Federal Realty projected FFO per share in the range of $6.27-$6.32.
For the full year, the Zacks Consensus Estimate for FFO per share has moved marginally northward to $6.30 over the past month. The figure indicates a 13.1% increase year over year on revenues of $1.07 billion.
Earning Whispers
Our proven model predicts a surprise in terms of FFO per share for FRT this season. The combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — increases the odds of a beat.
Earnings ESP: Federal Realty has an Earnings ESP of +0.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: FRT currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.
Other Stocks That Warrant a Look
Here are some other stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Regency Centers (REG - Free Report) is slated to report quarterly numbers on Feb 9. REG has an Earnings ESP of +0.47% and carries a Zacks Rank of 3.
Stag Industrial (STAG - Free Report) is scheduled to report quarterly figures on Feb 15. STAG has an Earnings ESP of +2.89% and a Zacks Rank #2 (Buy) currently.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.