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PS Business Parks (PSB) Up 3.1% Since Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for PS Business Parks, Inc. (PSB - Free Report) . Shares have added about 3.1% in that time frame, outperforming 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.

PS Business Parks Q2 FFO Tops Estimates, Revenues Miss

PS Business Parks reported second-quarter 2017 adjusted FFO of $1.55 per share, surpassing the Zacks Consensus Estimate of $1.52. Moreover, the figure came in 14% higher than $1.36 recorded in the prior-year quarter. The rise was stemmed from higher net operating income (NOI), reduced interest expenses and savings from lower preferred distributions.

Total operating revenue came in at around $99.9 million, reflecting 3.9% growth from the prior-year figure. However, it missed the Zacks Consensus Estimate of $100.8 million.

Quarter in Detail

Same Park rental income was up 4.5% year over year, while Same Park operating expenses increased 2.9%. As a result, Same Park NOI climbed 5.2% year over year, mainly on the back of improving rental rates and occupancy.

Annualized Same Park realized rent per square foot rose 4.4% year over year to $15.27. Same Park weighted average occupancy in the quarter was 93.7%, up 20 basis points year over year.  

Liquidity

PS Business Parks exited second-quarter 2017 with cash and cash equivalents of $5.4 million, lower than the prior-year end tally of $128.6 million. The company’s available balance under its $250-million unsecured credit facility at the end of the reported quarter was $149 million.

Dividend Update

Concurrent with its second-quarter earnings release, the company announced a regular quarterly dividend of $0.85 per share, same as the prior payout. The dividend is payable on Sep 28 to shareholders of record as of Sep 13, 2017.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter

PS Business Parks, Inc. Price and Consensus

 

VGM Scores

At this time, the stock has a subpar Growth Score of D, though it is lagging a bit on the momentum front with an F. Following the exact same course, the stock was allocated also a grade of F on the value side, putting it in the bottom 20% quintile 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.

Our style scores indicate investors will probably be better served looking elsewhere.

Outlook

Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising.  It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.




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