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Aimco (AIV) Up 2.5% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Apartment Investment and Management Company (AIV - Free Report) . Shares have added about 2.5% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Aimco's Q4 FFO In line, Increases Y/Y; Revenues Beat
Aimco reported fourth-quarter 2016 pro forma FFO per share of $0.60, in line with the Zacks Consensus Estimate. The prior-year quarter figure was $0.58.
For full-year 2016, pro forma FFO per share came in at $2.32, beating the Zacks Consensus Estimate by $0.01. The figure for full-year 2015 was $2.23.
The year-over-year rise in quarterly FFO per share can be attributed to conventional same store property NOI growth, higher contribution from development, redevelopment and acquisition activities and lower casualty losses. These were partly offset by the loss of income from the sale of apartment communities and rise in interest expenses.
For the reported quarter, total revenue came in at $249.5 million, beating the Zacks Consensus Estimate of $242.4 million, and exceeding the prior-year quarter figure by 1.5%.
For full-year 2016, total revenue came in at $995.9 million, exceeding the prior-year figure by 1.5%.
Quarter in Detail
In the Conventional real estate portfolio, same-store revenues increased 4.4% year over year to $160.7 million, while expenses fell 0.8% to $46.0 million. Consequently, same-store NOI climbed 6.6% to $114.7 million on a year-over-year basis.
Same-store average daily occupancy rose 0.4% year over year to 96.0%. Rental rates on new leases were down 1.9% from the expiring lease rates whereas rental rates on renewal leases were up 4.8% from the expiring lease rates.
As of Dec 31, 2016, Aimco held cash and restricted cash on hand of $131 million. Moreover, the estimated fair market value of the company’s unencumbered apartment communities was $1.6 billion.
Further, at the end of the quarter, Aimco’s outstanding borrowings on its revolving credit facility were $18 million and available capacity was $570 million, after considering $12 million of letters of credit backed by the facility.
Portfolio Activity
During the quarter, Aimco invested $38 million in redevelopment. Of this, $15 million was associated with the redevelopment of Park Towne Place and The Sterling, mixed-use communities in Center City Philadelphia.
As intended, Aimco continues to sell 5–10% of its lowest rated portfolio each year and uses the proceeds for acquisition and redevelopment of higher-quality apartments. Through these measures, the company maintained its conventional percentage NOI in target markets at 88% in fourth-quarter 2016, unchanged from that of the prior-year quarter. Moreover, revenue per apartment home improved 8% year over year to $1,978 from $1,840 a year ago.
2017 Guidance
For 2017, Aimco expects pro forma FFO per share in the range of $2.39–$2.49.
For first-quarter 2017, Aimco projects pro forma FFO per share in the band of $0.55–$0.59.
Dividend
On Jan 31, 2017, Aimco declared a quarterly cash dividend of $0.36 per share of Class A Common Stock for the fourth quarter. This marks a sequential increase of 9%. The dividend will be paid on Feb 28 to stockholders on record as of Feb 17.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Apartment Investment and Management Company Price and Consensus
At this time, Aimco's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with a 'B'. Charting a somewhat similar path, 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 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for momentum based on our styles scores.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Aimco (AIV) Up 2.5% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Apartment Investment and Management Company (AIV - Free Report) . Shares have added about 2.5% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Aimco's Q4 FFO In line, Increases Y/Y; Revenues Beat
Aimco reported fourth-quarter 2016 pro forma FFO per share of $0.60, in line with the Zacks Consensus Estimate. The prior-year quarter figure was $0.58.
For full-year 2016, pro forma FFO per share came in at $2.32, beating the Zacks Consensus Estimate by $0.01. The figure for full-year 2015 was $2.23.
The year-over-year rise in quarterly FFO per share can be attributed to conventional same store property NOI growth, higher contribution from development, redevelopment and acquisition activities and lower casualty losses. These were partly offset by the loss of income from the sale of apartment communities and rise in interest expenses.
For the reported quarter, total revenue came in at $249.5 million, beating the Zacks Consensus Estimate of $242.4 million, and exceeding the prior-year quarter figure by 1.5%.
For full-year 2016, total revenue came in at $995.9 million, exceeding the prior-year figure by 1.5%.
Quarter in Detail
In the Conventional real estate portfolio, same-store revenues increased 4.4% year over year to $160.7 million, while expenses fell 0.8% to $46.0 million. Consequently, same-store NOI climbed 6.6% to $114.7 million on a year-over-year basis.
Same-store average daily occupancy rose 0.4% year over year to 96.0%. Rental rates on new leases were down 1.9% from the expiring lease rates whereas rental rates on renewal leases were up 4.8% from the expiring lease rates.
As of Dec 31, 2016, Aimco held cash and restricted cash on hand of $131 million. Moreover, the estimated fair market value of the company’s unencumbered apartment communities was $1.6 billion.
Further, at the end of the quarter, Aimco’s outstanding borrowings on its revolving credit facility were $18 million and available capacity was $570 million, after considering $12 million of letters of credit backed by the facility.
Portfolio Activity
During the quarter, Aimco invested $38 million in redevelopment. Of this, $15 million was associated with the redevelopment of Park Towne Place and The Sterling, mixed-use communities in Center City Philadelphia.
As intended, Aimco continues to sell 5–10% of its lowest rated portfolio each year and uses the proceeds for acquisition and redevelopment of higher-quality apartments. Through these measures, the company maintained its conventional percentage NOI in target markets at 88% in fourth-quarter 2016, unchanged from that of the prior-year quarter. Moreover, revenue per apartment home improved 8% year over year to $1,978 from $1,840 a year ago.
2017 Guidance
For 2017, Aimco expects pro forma FFO per share in the range of $2.39–$2.49.
For first-quarter 2017, Aimco projects pro forma FFO per share in the band of $0.55–$0.59.
Dividend
On Jan 31, 2017, Aimco declared a quarterly cash dividend of $0.36 per share of Class A Common Stock for the fourth quarter. This marks a sequential increase of 9%. The dividend will be paid on Feb 28 to stockholders on record as of Feb 17.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Apartment Investment and Management Company Price and Consensus
Apartment Investment and Management Company Price and Consensus | Apartment Investment and Management Company Quote
VGM Scores
At this time, Aimco's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with a 'B'. Charting a somewhat similar path, 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 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for momentum based on our styles scores.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.