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Why Is Liberty Property (LPT) Up 6.4% Since Last Earnings Report?

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It has been about a month since the last earnings report for Liberty Property (LPT - Free Report) . Shares have added about 6.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Liberty Property 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 drivers.

Liberty Property Beats Q3 FFO & Revenue Estimates

Liberty Property reported third-quarter 2019 NAREIT FFO per share of 69 cents, flat year over year. This included gains on sales of non-depreciable assets that were partially offset by expensed pursuit costs, amounting 4 cents per share. The reported tally surpassed the Zacks Consensus Estimate of 63 cents.

Results indicate decent leasing activity and encouraging rent growth.

Further, third-quarter revenues were up 1.1% from the prior-year quarter to around $163.2 million. The top-line figure also outpaced the Zacks Consensus Estimate of $161.2 million.

Quarter in Detail

During the reported quarter, Liberty Property accomplished lease deals for 6.2 million square feet of space for its industrial portfolio. As of Sep 30, 2019, occupancy in the company’s in-service operating portfolio, spanning 107 million square feet, shrunk 60 basis points sequentially to 94.6%. Rents increased 5.4% on a cash basis (16% GAAP) on retention and replacement leases commenced during the period under consideration.

Property level operating income for same-store properties inched up 0.1% on a cash basis (0.3% GAAP) year over year.

Portfolio Activity

During the September-end quarter, Liberty Property acquired one industrial property, aggregating 203,000 square feet, for $55.5 million. At the same time, the company sold six operating properties, totaling 763,000 square feet, for $197.3 million.

The company brought into service six industrial properties, comprising 3 million square feet of space for a total investment of $193.6 million. These properties were 59.5% occupied as of the end of the third quarter.

Balance-Sheet Position

Liberty Property exited the third quarter with cash and cash equivalents of around $514.9 million, up from the $84.9 million recorded at the end of December 2018.

How Have Estimates Been Moving Since Then?

Estimates review followed a downward path over the past two months.

VGM Scores

At this time, Liberty Property has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Liberty Property has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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