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Cousins Properties (CUZ) Up 1.2% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Cousins Properties (CUZ - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.

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

Cousins Properties Trumps Q3 FFO & Revenue Estimates

Cousins Properties reported third-quarter 2019 FFO per share (before TIER transaction costs) of 72 cents, surpassing the Zacks Consensus Estimate of 69 cents. Further, the figure came improved 14.3% year over year.

The company’s third-quarter 2019 revenue figure recorded year-over-year growth. It also witnessed increase in same-property cash NOI.

Rental property revenues for the quarter came in at $180.8 million, which compared favorably with the $115.7 million witnessed in the year-ago quarter. The reported figure also outpaced the Zacks Consensus Estimate of $175 million.

Quarter in Detail

Cousins Properties executed leases for 741,367 square feet of office space during the September-end quarter. Same-property NOI, on a cash basis, increased 2.9% from the year-ago quarter. Moreover, second-generation net rent per square foot (cash basis) increased 8.1%.

However, weighted average occupancy for the company’s same-property portfolio shrunk 100 basis points to 90.9% for the quarter ended Sep 30, 2019.  

Cousins Properties exited the third quarter with cash and cash equivalents of around $12.4 million compared with the $2.5 million recorded as of Dec 31, 2018.

2019 Outlook

Cousins Properties has raised and narrowed its guidance for the full-year 2019 FFO per share. The company expects FFO per share (excluding transaction costs) in the range of $2.93 to $3 compared with the previous guidance of $2.81 to $2.93.

The projection for same property net operating income growth (on a cash basis) has been revised to 4-5%, up from 3.25-5.25%. Furthermore, fee and other income is projected at $35-$37 million, up from the $32-$34 million estimated earlier, due to higher lease termination fees.

2020 Outlook

Cousins Properties also provided its guidance for the full-year 2020 FFO per share. The company expects FFO per share in the $2.71-$2.85 band.

Same property net operating income growth (on a cash basis) is projected at 4-6%. Furthermore, fee and other income is anticipated in the range of $21 million to $23 million.

How Have Estimates Been Moving Since Then?

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

VGM Scores

At this time, Cousins Properties has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 D. 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 these revisions looks promising. It comes with little surprise Cousins Properties has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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