It has been about a month since the last earnings report for UDR (UDR). Shares have lost about 9.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is UDR 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.
UDR Q4 FFOA Meets, Revenues Beat Estimates, Occupancy Rises
UDR’s fourth-quarter 2019 FFOA per share of 54 cents came in line with the Zacks Consensus Estimate. The bottom line was higher than the prior-year quarter’s reported figure of 50 cents.
Fourth-quarter revenues from rental income climbed 9.8% year over year to $302.75 million. Further, the figure surpassed the Zacks Consensus Estimate of $298.49 million.
Results reflect year-over-year growth in same-store NOI and weighted average same-store physical occupancy.
In full-year 2019, FFOA per share came in at $2.08, up 6.1% year over year. It also matched the Zacks Consensus Estimate. Rental income of $1.14 billion, which jumped 10%, backed this upside.
Inside the Headlines
During the fourth quarter, same-store revenues increased 3.3% year over year. However, same-store expenses jumped 1.3%. Consequently, same-store NOI improved 4.1%. The residential REIT’s weighted average same-store physical occupancy expanded 10 basis points (bps), year over year, but remained flat sequentially at 96.9%. Fourth-quarter annualized-rate of turnover decreased 60 bps to 40.2%.
UDR’s wholly owned acquisition activity for the quarter included the buyout of one community — The Slade at Channelside — for an aggregate of $85.2 million.
At the end of the reported quarter, the company’s Developer Capital Program investment, including accrued return, totaled $405.3 million.
At the end of the fourth quarter, UDR’s development pipeline aggregated $278.5 million at its pro-rata ownership interest, out of which, 25% has already been funded.
As of Dec 31, 2019, the company had around $866.5 million of liquidity through a combination of cash and undrawn capacity on its credit facilities. Additionally, its total debt was $4.7 billion as of the same date.
The company has issued projections for first-quarter 2020. For the quarter, UDR projects FFOA per share in the 53-55 cents range.
Further, the company expects 2020 FFOA per share in the range of $2.18-$2.22. The consensus estimate for the same is $2.21. Moreover, it anticipates same-store NOI growth of 2.9-3.9% for the ongoing year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
Currently, UDR has a nice Growth Score of B, though it is lagging a lot 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 fifth 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, UDR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.