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Why Is Cousins Properties (CUZ) Down 3% Since Last Earnings Report?

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A month has gone by since the last earnings report for Cousins Properties (CUZ - Free Report) . Shares have lost about 3% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Cousins 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 its most recent earnings report in order to get a better handle on the important drivers.

Cousins Properties Q1 FFO Meets Estimates, Revenues Up

Cousins Properties reported first-quarter 2019 FFO per share of 20 cents, in line with the Zacks Consensus Estimate. Further, the figure comes in higher than the prior-year tally of 15 cents.

Cousin Properties’ first-quarter 2019 revenue figure recorded year-over-year growth. Further, the company witnessed increase in same-property cash NOI.

Rental property revenues for the quarter came in at $123.3 million, which compares favorably with $113.3 million witnessed in the year-ago quarter. Moreover, the figure outpaced the Zacks Consensus Estimate of $122.1 million.

Quarter in Detail

Cousins Properties executed leases for 682,129 square feet of office space in the January-March quarter. Same-property NOI, on a cash basis, increased 4% from the year-ago quarter. Moreover, second-generation net rent per square foot (cash basis) increased 7.1%.

During the reported quarter, the company commenced operations at Dimensional Place, a 281,000-square-foot office building situated in the South End submarket of Charlotte.

Further, the company signed a number of agreements with Norfolk Southern Railway Company. Per the agreements, the company will develop a new corporate headquarter for the later, recognizing associated fee income of $52.3 million. The company purchased 1200 Peachtree, a 370,000-square-foot office building in Midtown Atlanta, for $82 million.

Cousins Properties also entered into an agreement with TIER REIT to acquire the latter in a 100% stock-for-stock deal. The company sold air rights worth $13.3 million, which cover eight acres in Downtown Atlanta.
Cousins Properties exited the first quarter with cash and cash equivalents of $3.5 million up from $2.5 million recorded as of Dec 31, 2018.

2019 Outlook

Cousins Properties revised its guidance for full-year 2019 FFO per share. The company expects FFO per share to be in the band of 70-74 cents from the previous range of 70-75 cents.

The projection for same property NOI growth has been revised to 3-5% from 2-4%. Furthermore, the company now anticipates general and administrative expenses, net of capitalized salaries, in the range of $33.5-$35.5 million, up from the earlier estimate of $27-$29 million.

Cousins Properties does not expect to sell Meridian Mark Plaza this year.

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, Cousins Properties has a strong Growth Score of A, a grade with the same score on the momentum front. However, 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 B. 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 this revision looks promising. Notably, Cousins 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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