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Why Is PS Business Parks (PSB) Down 2.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for PS Business Parks (PSB - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.

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

PS Business Parks Q3 FFO Misses, Revenues Beat Estimates

PS Business Parksreported third-quarter 2019 FFO of $1.71 per share, which narrowly missed the Zacks Consensus Estimate of $1.73. However, the figure comes in 4.3% higher than the prior-year quarter’s $1.64.    

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 partly offset the positives.

Rental income came in at around $108.1 million, marking 4.1% growth from the year-ago quarter tally. The reported figure also exceeded the Zacks Consensus Estimate of $106.8 million.

Quarter in Detail

Same-Park rental income was up 4.2% year over year to $96.2 million, while Same-Park NOI climbed 3.6% year over year to $68.5 million, driven by improving rental rates.

Same-Park annualized revenue per occupied-square-foot increased 4.6% to $15.74. However, weighted average square-foot occupancy shrunk 40 basis points year on year to 94.7%.

Liquidity

PS Business Parks exited third-quarter 2019 with cash and cash equivalents of $6.7 million, down from the $37.4 million reported at the end of 2018.
 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, PS Business Parks has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile 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

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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