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GGP Up 4.1% Since Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for General Growth Properties, Inc. . Shares have added about 4.1% in that time frame.

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

GGP's FFO Misses Estimates in Q1, Revenues Increase Y/Y

GGP delivered first-quarter 2018 FFO per share of 35 cents, missing the Zacks Consensus Estimate of 37 cents. The figure also came in lower than the prior-year quarter tally of 36 cents.    

Results reflect year-over-year decline in same-store NOI.

The company posted revenues of $574.2 million, which lagged the Zacks Consensus Estimate of $603 million. However, the figure compared favorably with the year-ago tally of $566.3 million.

Quarter in Details

Same-store leased percentage was 95.3% at the quarter’s end. Initial NOI weighted rental rates for signed leases that have commenced in the trailing 12 months (on a suite-to-suite basis) expanded 13.4%, when compared to the rental rate for expiring leases. Further, tenant sales (all less anchors) inched up 0.9%, on a trailing 12-month basis, and excluding apparel sales, increased 2.5%.

Same store NOI as adjusted was $544.4 million, reflecting a decline of 0.8% year over year.

GGP’s development and redevelopment activities totaled $1.5 billion. Of this, projects worth $1.4 billion are under construction and $0.1 billion in the pipeline.

The company ended the first quarter with cash and cash equivalents of $178.2 million, up from $164.6 million as of Dec 31, 2017.

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 lower for the current quarter.

VGM Scores

At this time, GGP has an average Growth Score of C, however its Momentum is doing a lot better with an A. 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for momentum investors than growth investors.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. It's no surprise GGP has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.




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