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Highwoods Properties (HIW) Down 2% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Highwoods Properties (HIW - Free Report) . Shares have lost about 2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Highwoods Properties due for a breakout? 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.

Highwoods Properties' Q3 FFO Tops Estimates, NOI Up

Highwoods reported third-quarter 2018 FFO of 86 cents per share, beating the Zacks Consensus Estimate. Also, the figure remained unchanged year-over-year.

Results indicate growth in average in-place office cash rent per square foot and GAAP rent for second-generation office space. Also, the company witnessed growth in same-property cash net operating income (NOI).

Total revenues of $179.42 million surpassed the Zacks Consensus Estimate of $177.7 million. However, it compares unfavorably to the year-ago tally of $180.2 million.

Quarter in Detail

Highwoods leased 884,000 square feet of second-generation office space during the third quarter. Further, same-property cash NOI inched up 1.4% year over year.

At the end of the third quarter, the company’s development pipeline totaled $658 million and was 96% pre-leased. During the quarter, it placed two properties worth $67 million in service which were 84% leased.

Further, Highwoods sold a 24-acre industrial non-core land parcel for $2.1 million.

The company paid off bank term loan worth $10 million at LIBOR plus 110 bps. Notably, it did not issue any shares under the ATM program.

As of Sep 30, 2018, Highwoods had $5.3 million of cash and cash-equivalents compared with $3.2 million reported as of Dec 31, 2017.

2018 Outlook

Highwoods expects 2018 FFO per share of $3.42-$3.45, increasing the lower end and mid-point, from the previous range of $3.39-$3.45.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Highwoods Properties has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Highwoods Properties has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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