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UDR (UDR) Up 4.2% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for UDR (UDR - Free Report) . Shares have added about 4.2% in that time frame, outperforming the S&P 500.

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

UDR Q2 FFO Beats on Higher Revenues, NOI Solid, View Up

UDR reported FFO as adjusted per share of 49 cents for second-quarter 2018, surpassing the Zacks Consensus Estimate by a whisker. The figure came in higher than the prior-year tally of 47 cents.

Total revenues in the reported quarter climbed 3.9% year over year to $256.6 million. Further, the top line marginally beat the Zacks Consensus Estimate of $253.9 million. The revenue figure also compares favorably with the prior-year figure of $247.98 million. This upside primarily stemmed from rise in revenues from operating communities.

Inside the Headlines

During the quarter under review, same-store revenues increased 3.4% year over year. However, same-store expenses flared up 2.9%. Consequently, same-store net operating income (NOI) rose 3.5% year over year. This residential REIT’s same-store physical occupancy expanded 30 basis point (bps) to 97%. The second-quarter annualized-rate of turnover contracted 200 basis points from the prior-year period to 53.6%.

At the end of the second quarter, UDR’s development pipeline aggregated $810.5 million at its pro-rata ownership interest, out of which, 96% has already been funded.

As of Jun 30, 2018, the company had around $771.1 million available from a combination of cash and undrawn capacity on its credit facilities. Furthermore, its total debt was $3.75 billion as of the same date.

Portfolio Activity

At the end of the reported quarter, the company’s Developer Capital Program investment, including accrued return, totaled $179.2 million.

Guidance

For third-quarter 2018, UDR projects FFO as adjusted per share to be in the 48-50 cents range.

The company updated its estimates for full-year 2018. The FFO as adjusted per share lies in the range of $1.93-$1.96 compared with the prior projection of $1.91-$1.95. Moreover, the company anticipates same-store revenues, expenses and same-store NOI to remain in the range of 3-3.5% for the year compared with the previous estimate of 2.5-3.5%.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, UDR 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 F on the value side, putting it in the lowest 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 momentum based on our style scores.

Outlook

UDR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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