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SITE CENTERS CORP. (SITC) Up 11.9% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for SITE CENTERS CORP. (SITC - Free Report) . Shares have added about 11.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is SITE CENTERS CORP. 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 drivers.
SITE Centers Q3 OFFO & Revenues Beat, ’23 View Revised
SITE Centers reported third-quarter 2023 operating FFO (OFFO) per share of 33 cents, beating the Zacks Consensus Estimate of 28 cents. The figure also climbed 13.8% from the prior-year quarter.
Results reflected better-than-anticipated revenues aided by a rise in pro-rata base rent per square foot. The company also revised its outlook for 2023.
The company clocked in revenues of $143.1 million in the quarter, outpacing the Zacks Consensus Estimate of $135.1 million. Moreover, the figure rose 5.1% year over year.
Per David R. Lukes, president and CEO of SITC, “Third quarter results reflect a continuation of year-to-date trends including steady demand for vacant space in the Company’s supply constrained markets and recycling of capital from highly leased properties into Convenience assets. Rent commencements, the backfill of vacant space from bankruptcies and tactical redevelopment deliveries remain significant tailwinds for SITE Centers going forward.”
Quarter in Detail
SITC reported a leased rate of 94.6% on a pro-rata basis as of Sep 30, 2023, down from 95.5% in the prior quarter and 95.0% in the year-ago quarter. The sequential decline was mainly related to the recapture of the remaining units leased by Bed, Bath & Beyond and the sale of properties with an average leased rate of 98.5%, partially offset by new leasing activity.
The base rent per occupied square foot was $20.20 on a pro-rata basis as of Sep 30, 2023, compared with $19.11 a year ago.
The company generated pro-rata basis cash new and cash renewal leasing spreads of 58.2% and 6.6%, respectively, in the third quarter.
Moreover, the same-store NOI improved 2.9% on a pro-rata basis in the reported quarter, inclusive of redevelopment, from the prior-year quarter.
SITE Centers exited the third quarter with $26.6 million of cash, down from $28 million as of Jun 30, 2023.
Portfolio Activity
In the third quarter, SITC acquired three convenience shopping centers for $28.1 million. These included Towne Crossing Shops in Richmond, VA, for $4.2 million, Oaks at Slaughter in Austin, TX, for $14.1 million and Marketplace at 249 in Houston, TX, for $9.8 million.
The company disposed of five wholly-owned shopping centers during the quarter for $118.3 million.
2023 Outlook Revised
Based on its third-quarter results and announced transaction activity, SITE Centers revised its guidance for OFFO per share in the range of $1.16–$1.18, up from the earlier estimation of $1.13-$1.17.
Growth in same-store NOI (adjusted for 2022 uncollectible revenue impact) is expected in the band of 2.5-4.0%, revised upward from 1-4% projected earlier.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, SITE CENTERS CORP. has a subpar Growth Score of D, however its Momentum Score is doing a lot 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, SITE CENTERS CORP. 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
SITE CENTERS CORP. is part of the Zacks REIT and Equity Trust - Retail industry. Over the past month, Equinix (EQIX - Free Report) , a stock from the same industry, has gained 9.2%. The company reported its results for the quarter ended September 2023 more than a month ago.
Equinix reported revenues of $2.06 billion in the last reported quarter, representing a year-over-year change of +12%. EPS of $2.93 for the same period compares with $7.73 a year ago.
For the current quarter, Equinix is expected to post earnings of $6.78 per share, indicating a change of -4.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.
Equinix has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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SITE CENTERS CORP. (SITC) Up 11.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for SITE CENTERS CORP. (SITC - Free Report) . Shares have added about 11.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is SITE CENTERS CORP. 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 drivers.
SITE Centers Q3 OFFO & Revenues Beat, ’23 View Revised
SITE Centers reported third-quarter 2023 operating FFO (OFFO) per share of 33 cents, beating the Zacks Consensus Estimate of 28 cents. The figure also climbed 13.8% from the prior-year quarter.
Results reflected better-than-anticipated revenues aided by a rise in pro-rata base rent per square foot. The company also revised its outlook for 2023.
The company clocked in revenues of $143.1 million in the quarter, outpacing the Zacks Consensus Estimate of $135.1 million. Moreover, the figure rose 5.1% year over year.
Per David R. Lukes, president and CEO of SITC, “Third quarter results reflect a continuation of year-to-date trends including steady demand for vacant space in the Company’s supply constrained markets and recycling of capital from highly leased properties into Convenience assets. Rent commencements, the backfill of vacant space from bankruptcies and tactical redevelopment deliveries remain significant tailwinds for SITE Centers going forward.”
Quarter in Detail
SITC reported a leased rate of 94.6% on a pro-rata basis as of Sep 30, 2023, down from 95.5% in the prior quarter and 95.0% in the year-ago quarter. The sequential decline was mainly related to the recapture of the remaining units leased by Bed, Bath & Beyond and the sale of properties with an average leased rate of 98.5%, partially offset by new leasing activity.
The base rent per occupied square foot was $20.20 on a pro-rata basis as of Sep 30, 2023, compared with $19.11 a year ago.
The company generated pro-rata basis cash new and cash renewal leasing spreads of 58.2% and 6.6%, respectively, in the third quarter.
Moreover, the same-store NOI improved 2.9% on a pro-rata basis in the reported quarter, inclusive of redevelopment, from the prior-year quarter.
SITE Centers exited the third quarter with $26.6 million of cash, down from $28 million as of Jun 30, 2023.
Portfolio Activity
In the third quarter, SITC acquired three convenience shopping centers for $28.1 million. These included Towne Crossing Shops in Richmond, VA, for $4.2 million, Oaks at Slaughter in Austin, TX, for $14.1 million and Marketplace at 249 in Houston, TX, for $9.8 million.
The company disposed of five wholly-owned shopping centers during the quarter for $118.3 million.
2023 Outlook Revised
Based on its third-quarter results and announced transaction activity, SITE Centers revised its guidance for OFFO per share in the range of $1.16–$1.18, up from the earlier estimation of $1.13-$1.17.
Growth in same-store NOI (adjusted for 2022 uncollectible revenue impact) is expected in the band of 2.5-4.0%, revised upward from 1-4% projected earlier.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, SITE CENTERS CORP. has a subpar Growth Score of D, however its Momentum Score is doing a lot 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, SITE CENTERS CORP. 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
SITE CENTERS CORP. is part of the Zacks REIT and Equity Trust - Retail industry. Over the past month, Equinix (EQIX - Free Report) , a stock from the same industry, has gained 9.2%. The company reported its results for the quarter ended September 2023 more than a month ago.
Equinix reported revenues of $2.06 billion in the last reported quarter, representing a year-over-year change of +12%. EPS of $2.93 for the same period compares with $7.73 a year ago.
For the current quarter, Equinix is expected to post earnings of $6.78 per share, indicating a change of -4.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.
Equinix has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.