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Key Factors to Impact AvalonBay (AVB) This Earnings Season
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AvalonBay Communities, Inc. (AVB - Free Report) is slated to report third-quarter 2018 results on Oct 29, after the market closes. The company’s quarterly performance is likely to reflect growth in revenues as well as funds from operations (FFO) per share.
In the last reported quarter, this residential REIT delivered a better-than-expected performance with respect to FFO per share. The results highlighted growth in average rental rates and occupancy.
Over the trailing four quarters, the company surpassed estimates on two occasions, met in another and missed in the other. This resulted in an average negative surprise of 0.44%. The graph below depicts the surprise history of the company:
AvalonBay Communities, Inc. Price and EPS Surprise
Let’s see how things are shaping up for this announcement.
Factors to Consider
The third quarter of this year proved to be an encouraging one for the U.S. apartment market, with accelerating rent growth and increasing occupancy level. In fact, rents grew at an annual pace of 2.9% in the quarter, reversing the pattern of slowing price hikes since late 2015, per a study by the real estate technology and analytics firm, RealPage, Inc. . Also, occupancy came in at 95.8%, up from 95.4% reported in the second quarter.
Amid these, AvalonBay is expected to benefit from high-quality assets in premium locations, favorable demographics, household formation, recovering economy and job market growth. The company is also expected to have maintained its decent balance sheet strength.
The company’s performance in the to-be-reported quarter is likely to display continued high occupancy. Also, the Zacks Consensus Estimate for average rental rates at established communities is pegged at $2,612, indicating a 0.6% sequential and 3% year-over-year increase.
Moreover, the Zacks Consensus Estimate for third-quarter revenues is $574.3 million, denoting an expected 4.3% year-over-year increase. Also, the Zacks Consensus Estimate for FFO per share is currently pegged at $2.26, indicating 3.2% growth from the prior-year period.
Additionally, the company’s activities during the quarter somewhat gained analysts’ confidence. Consequently, the Zacks Consensus Estimate has moved up a cent to $2.26 over the past 30 days.
However, new apartment deliveries are anticipated to have remained elevated in the company’s markets in the Jul-Sep quarter. This high supply is likely to put pressure on its rental rates. Furthermore, high concession activity amid elevated supply remains a concern. In addition, rate hike adds to its woes.
Earnings Whispers
Our proven model does not conclusively show that AvalonBay is likely to beat estimates in the to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: AvalonBay has an Earnings ESP of -0.24%.
Zacks Rank: AvalonBay’s Zacks Rank of 3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident about a positive surprise.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise in the quarter to be reported:
Welltower Inc. (WELL - Free Report) , slated to release third-quarter results on Oct 30, has an Earnings ESP of +1.06% and a Zacks Rank of 3.
Public Storage (PSA - Free Report) , scheduled to release quarterly earnings on Oct 30, has an Earnings ESP of +0.27% and a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Key Factors to Impact AvalonBay (AVB) This Earnings Season
AvalonBay Communities, Inc. (AVB - Free Report) is slated to report third-quarter 2018 results on Oct 29, after the market closes. The company’s quarterly performance is likely to reflect growth in revenues as well as funds from operations (FFO) per share.
In the last reported quarter, this residential REIT delivered a better-than-expected performance with respect to FFO per share. The results highlighted growth in average rental rates and occupancy.
Over the trailing four quarters, the company surpassed estimates on two occasions, met in another and missed in the other. This resulted in an average negative surprise of 0.44%. The graph below depicts the surprise history of the company:
AvalonBay Communities, Inc. Price and EPS Surprise
AvalonBay Communities, Inc. Price and EPS Surprise | AvalonBay Communities, Inc. Quote
Let’s see how things are shaping up for this announcement.
Factors to Consider
The third quarter of this year proved to be an encouraging one for the U.S. apartment market, with accelerating rent growth and increasing occupancy level. In fact, rents grew at an annual pace of 2.9% in the quarter, reversing the pattern of slowing price hikes since late 2015, per a study by the real estate technology and analytics firm, RealPage, Inc. . Also, occupancy came in at 95.8%, up from 95.4% reported in the second quarter.
Amid these, AvalonBay is expected to benefit from high-quality assets in premium locations, favorable demographics, household formation, recovering economy and job market growth. The company is also expected to have maintained its decent balance sheet strength.
The company’s performance in the to-be-reported quarter is likely to display continued high occupancy. Also, the Zacks Consensus Estimate for average rental rates at established communities is pegged at $2,612, indicating a 0.6% sequential and 3% year-over-year increase.
Moreover, the Zacks Consensus Estimate for third-quarter revenues is $574.3 million, denoting an expected 4.3% year-over-year increase. Also, the Zacks Consensus Estimate for FFO per share is currently pegged at $2.26, indicating 3.2% growth from the prior-year period.
Additionally, the company’s activities during the quarter somewhat gained analysts’ confidence. Consequently, the Zacks Consensus Estimate has moved up a cent to $2.26 over the past 30 days.
However, new apartment deliveries are anticipated to have remained elevated in the company’s markets in the Jul-Sep quarter. This high supply is likely to put pressure on its rental rates. Furthermore, high concession activity amid elevated supply remains a concern. In addition, rate hike adds to its woes.
Earnings Whispers
Our proven model does not conclusively show that AvalonBay is likely to beat estimates in the to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: AvalonBay has an Earnings ESP of -0.24%.
Zacks Rank: AvalonBay’s Zacks Rank of 3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident about a positive surprise.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise in the quarter to be reported:
Regency Centers Corporation (REG - Free Report) , scheduled to release quarterly earnings on Oct 25, has an Earnings ESP of +0.21% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Welltower Inc. (WELL - Free Report) , slated to release third-quarter results on Oct 30, has an Earnings ESP of +1.06% and a Zacks Rank of 3.
Public Storage (PSA - Free Report) , scheduled to release quarterly earnings on Oct 30, has an Earnings ESP of +0.27% and a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>