It has been about a month since the last earnings report for Boston Properties (BXP - Free Report) . Shares have added about 7.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Boston Properties 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.
Boston Properties Tops Q3 FFO Estimates, Issues '19 View
Boston Properties’ third-quarter 2018 FFO per share of $1.64 surpassed the Zacks Consensus Estimate of $1.63. The figure also came in higher than the company’s prior-year quarter’s tally of $1.57.
Results were supported by higher revenues from development and management services. Further, the company achieved higher occupancy as compared to the previous quarter. Boston Properties has also updated its outlook for full-year 2018 and provided initial guidance for 2019.
Adjusted revenues, comprising base rent and recoveries from tenants during the quarter, increased 3.4% year over year to $628.3 million. Also, the figure surpassed the Zacks Consensus Estimate of $627.9 million.
As of Sep 30, 2018, Boston Properties’ portfolio comprised 200 properties, covering a total of around 52.7 million square feet of space. This included 14 under construction/redevelopment properties, covering an area of 7.5 million square feet.
The company’s overall operating portfolio, including 181 in-service office properties was 91.1% occupied as of Sep 30, 2018, indicating a sequential expansion of 70 basis points (bps). Moreover, total portfolio was 91.1% leased as of Sep 30, 2018, compared to 90.7% as of Dec-end 2017.
During the Sep-end quarter, Boston Properties accomplished the sale of Quorum Office Park — an around 268,000 net rentable square foot Class An office property — in Chelmsford, MA, for a gross price of roughly $35.3 million. This resulted in a gain on sale of real estate aggregating about $7.9 million.
In addition to this, the company completed and fully placed in-service its Proto Kendall Square development project in Cambridge, MA, in the quarter under review. The project includes 280 apartment units and retail space, totaling around 167,000 square feet of area. The retail space is approximately 98% leased, while residential units are 49% leased.
Boston Properties exited the third quarter with cash and cash equivalents of around $322.5 million, down from $434.8 million as of Dec 31, 2017.
Boston Properties projects its fourth-quarter 2018 FFO per share of $1.68-$1.70.
The company updated its full-year 2018 FFO per share guidance to $6.39-$6.41 compared to the prior outlook of $6.36-$6.41.
For full-year 2019, Boston Properties provided its FFO per share guidance to $6.75-$6.92, indicating 7% year-on-year growth at the mid-point.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
Currently, Boston Properties has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Boston Properties has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.