A month has gone by since the last earnings report for Highwoods Properties (HIW - Free Report) . Shares have lost about 1% in that time frame, outperforming 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 its most recent earnings report in order to get a better handle on the important drivers.
Highwoods Properties Q2 FFO & Revenues Top Estimates
Highwoods second-quarter FFO per share of 87 cents surpassed the Zacks Consensus Estimate of 85 cents. The figure remained flat year over year.
The company recorded year-over-year growth in same-property cash net operating income (NOI). Moreover, rents improved on both GAAP and cash basis.
Particularly, rental and other revenues of approximately $184.1 million in the quarter outpaced the Zacks Consensus Estimate of $179.9 million. Further, the figure compared favorably with the year-earlier quarter’s reported tally of around $178.8 million.
Quarter in Detail
Highwoods leased 1.1 million square feet of second-generation office space during the second quarter. Rents were up 16.8% on a GAAP basis and 2.5% on a cash basis.
Same-property cash NOI grew 3.1% year over year and 4.6% excluding the effect from Laser Spine’s sudden closure. The company ended the second quarter with occupancy of 90.9%.
At the end of the second quarter, Highwoods’ development pipeline totaled $503 million and was 80.3% pre-leased. During the quarter, the company placed two office properties in service, involving estimated investment of $203 million in aggregate. These properties were 98.4% leased.
As of Jun 30, 2019, Highwoods had around $4.5 million of cash and cash-equivalents compared with around $3.8 million reported as of Dec 31, 2018. The company did not issue any shares under the ATM program.
Highwoods has revised its 2019 FFO per share guidance to $3.32-$3.38 from $3.29-$3.39 issued earlier.
The company projects year-end occupancy at 91.5%-92.3%. This assumes no backfill of the space vacated by Laser Spine at the company’s 5332 Avion property. Further, for the ongoing year, dispositions and acquisitions are anticipated in the range of $100-$150 million and up to $200 million, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
At this time, Highwoods Properties has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Highwoods Properties has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.