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PS Business Parks (PSB) Up 1.1% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for PS Business Parks (PSB - Free Report) . Shares have added about 1.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is PS Business Parks 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.

PS Business Parks Q2 FFO Beats on Rental Rate Growth

PS Business Parks reported second-quarter 2019 FFO of $1.75 per share, which surpassed the Zacks Consensus Estimate of $1.68. The figure also comes in 10.1% higher than the prior-year quarter’s $1.59.    

Results highlight improvement in same-park NOI, backed by growth in rental rates, as well as higher NOI from non-same-park and multi-family assets. However, NOI reduction due to facilities sold in 2018 and assets held for sale as of Jun 30, 2019, partly offset the positives.

Rental income came in at around $107.8 million, marking 5.9% growth from the year-ago quarter tally. The reported figure also exceeded the Zacks Consensus Estimate of $105.1 million.

Quarter in Detail

Same-park rental income was up 4.4% year over year to $95.9 million, while same-park NOI climbed 5.2% year over year to nearly $69 million, driven by improving rental rates.

Same-park annualized revenue per occupied-square-foot increased 4.6% to $15.77. However, weighted average square-foot occupancy shrunk 20 basis points year on year to 94.3%.

Liquidity

PS Business Parks exited second-quarter 2019 with cash and cash equivalents of $42 million, up from $37.4 million reported at the end of 2018.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

At this time, PS Business Parks has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. 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 C. 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, PS Business Parks has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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