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Why Is Kimco Realty (KIM) Up 6.4% Since Its Last Earnings Report?

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It has been about a month since the last earnings report for Kimco Realty Corporation (KIM - Free Report) . Shares have added about 6.4% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is KIM 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 catalysts.

Kimco Realty Q1 FFO Beats Estimates, Occupancy Rises

Kimco’s first-quarter 2018 FFO as adjusted came in at 37 cents per share, surpassing the Zacks Consensus Estimate of 36 cents. The figure remained unchanged year over year.

The company posted revenues from rental properties of $230.4 million in the reported quarter, reflecting a year-over-year increase of 1.2%. Moreover, total revenues improved 3.6% to $304.1 million year over year.

Further, Kimco reported new leasing spreads of 15.6%. This represents the 16th quarter of sequential increase in rental rate for new leases by more than 10% over the prior rent for the comparable space.

Quarter in Detail

At the end of the first quarter, pro-rata occupancy came in at 96.1%, indicating an expansion of 10 basis points (bps) sequentially, and 80 bps year over year.

Same-property NOI climbed 2.6% year over year. Pro-rata rental-rate leasing spreads grew 8.1%, with rental rate for new leases and renewals/options, climbing 15.6% and 7.3%, respectively.

Balance Sheet Position

Kimco exited first-quarter 2018 with cash and cash equivalents of around $218.3 million, down from $238.5 million recorded at year-end 2017.

Portfolio Activity

During the reported quarter, Kimco sold 21 shopping centers, spanning 2.3 million square feet of space, for a gross price of $219.5 million, with the company’s share of the sales price being $210.2 million.

Guidance

Kimco provided its FFO per share outlook for full-year 2018. The company projects FFO per share at $1.42-$1.46, similar to the previous guidance. This is based on same-property NOI growth (excluding redevelopments) projections of 1.5-2.00%, net disposition estimations of $700-$900 million, and total redevelopment & development investment of $425-$525 million.

Share Repurchase Program

The company repurchased 1.6 million shares of common stock for $24.3 million under its $300-million share-repurchase program in the first quarter.

Dividend Update

Kimco announced a second-quarter common stock dividend of 28 cents per share. This dividend will be paid on Jul 16 to stockholders of record on Jul 3, 2018.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to four lower.

Kimco Realty Corporation Price and Consensus

VGM Scores

At this time, KIM has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.

The company's stock is suitable solely for value based on our styles scores.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, KIM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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