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What's in the Offing for Kimco (KIM) This Earnings Season?
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Kimco Realty Corporation (KIM - Free Report) is slated to report first-quarter 2020 earnings on May 8, before the market opens. While its funds from operations (FFO) per share are anticipated to have been stable, year on year, revenues are likely to reflect a decrease.
In the last reported quarter, this New Hyde Park, NY-based retail real estate investment trust (REIT) delivered a positive surprise of 2.78% in terms of FFO per share. Results reflected portfolio occupancy matching an all-time high, healthy leasing spreads on new lease and positive same-property net operating income. The company registered new leasing spreads of 12.5%.
Kimco beat the Zacks Consensus Estimate in three of the trailing four quarters and met in the other, the average positive surprise being 2.09%. This is depicted in the graph below:
Let’s see how things have shaped up for this announcement.
Factors at Play
Amid the transformation in the retail landscape, Kimco is focused on service and experiential tenants, and omni-channel players. Moreover, the company has been targeting expansion of its small-shops portfolio. These shops comprise service-based industries, such as restaurants, salons and spas, personal fitness and medical practices. The shops enjoy frequent customer traffic and are Internet resistant. The company has also been making efforts toward its key strategy that envisaged the ownership of high-quality assets, concentrated in major metro markets which offer several growth levers.
Nevertheless, though the first quarter began on a positive note with a resilient economy and decent job-market strength, things got weary in the second half of the period thanks to the coronavirus pandemic.
Notably, the escalating number of coronavirus cases has forced several retailers to close stores, in order to contain the spread of the virus. Some retailers have also reduced store hours, while many others are keeping their e-retail operations running as consumers are now increasingly opting for online purchases. As a result, retail REITs, which have already been battling store closure and bankruptcy issues, are feeling the brunt because consumers are avoiding gathering in large public spaces.
Kimco, too, is not immune to move outs, store closures and retailer bankruptcies. The choppy retail real estate environment is likely to have curbed its growth momentum in the to-be-reported quarter to some extent, as secular industry headwinds continue to dampen industry fundamentals.
Further, Kimco has withdrawn its full-year 2020 guidance in light of the pandemic and related uncertainties regarding. However, in these uncertain times, having a grocery component has been saving the grace of retail REITs, and Kimco has a high-quality, mixed-use portfolio concentrated in the top U.S. markets and 78% of its annual base rent comes from grocery-anchored centers.
Amid this, the company has been making efforts to boost its balance-sheet position. Per an Apr 24 announcement, the company has in excess of $2.2 billion of available liquidity, with $1.3 billion of availability on its unsecured revolving credit facility and a solid cash position of more than $900 million.
Apart from these, the company has been shedding non-core assets in sync with its portfolio-revamp strategy. While the disposition efforts are encouraging for the long term, the dilutive impact on earnings from high asset sales cannot be averted in the near term.
The Zacks Consensus Estimate for Kimco’s first-quarter revenues is currently pinned at $290.6 million — reflecting a 1.5% decline from the prior-year quarter reported figure.
In addition to the above, Kimco’s activities during the January-march quarter were inadequate to gain analyst confidence. The Zacks Consensus Estimate of 37 cents for quarterly FFO per share remained unchanged over the past month. Also, the figure remains stable, year over year.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for Kimco this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Kimco currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -1.37%.
CBL Properties (CBL - Free Report) , slated to release earnings results on May 18, currently has an Earnings ESP of +11.11% and a Zacks Rank #3.
VEREIT, Inc. , set to report quarterly numbers on May 20, currently has an Earnings ESP of +5.15% and a Zacks Rank of 3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
What's in the Offing for Kimco (KIM) This Earnings Season?
Kimco Realty Corporation (KIM - Free Report) is slated to report first-quarter 2020 earnings on May 8, before the market opens. While its funds from operations (FFO) per share are anticipated to have been stable, year on year, revenues are likely to reflect a decrease.
In the last reported quarter, this New Hyde Park, NY-based retail real estate investment trust (REIT) delivered a positive surprise of 2.78% in terms of FFO per share. Results reflected portfolio occupancy matching an all-time high, healthy leasing spreads on new lease and positive same-property net operating income. The company registered new leasing spreads of 12.5%.
Kimco beat the Zacks Consensus Estimate in three of the trailing four quarters and met in the other, the average positive surprise being 2.09%. This is depicted in the graph below:
Kimco Realty Corporation Price and EPS Surprise
Kimco Realty Corporation price-eps-surprise | Kimco Realty Corporation Quote
Let’s see how things have shaped up for this announcement.
Factors at Play
Amid the transformation in the retail landscape, Kimco is focused on service and experiential tenants, and omni-channel players. Moreover, the company has been targeting expansion of its small-shops portfolio. These shops comprise service-based industries, such as restaurants, salons and spas, personal fitness and medical practices. The shops enjoy frequent customer traffic and are Internet resistant. The company has also been making efforts toward its key strategy that envisaged the ownership of high-quality assets, concentrated in major metro markets which offer several growth levers.
Nevertheless, though the first quarter began on a positive note with a resilient economy and decent job-market strength, things got weary in the second half of the period thanks to the coronavirus pandemic.
Notably, the escalating number of coronavirus cases has forced several retailers to close stores, in order to contain the spread of the virus. Some retailers have also reduced store hours, while many others are keeping their e-retail operations running as consumers are now increasingly opting for online purchases. As a result, retail REITs, which have already been battling store closure and bankruptcy issues, are feeling the brunt because consumers are avoiding gathering in large public spaces.
Kimco, too, is not immune to move outs, store closures and retailer bankruptcies. The choppy retail real estate environment is likely to have curbed its growth momentum in the to-be-reported quarter to some extent, as secular industry headwinds continue to dampen industry fundamentals.
Further, Kimco has withdrawn its full-year 2020 guidance in light of the pandemic and related uncertainties regarding. However, in these uncertain times, having a grocery component has been saving the grace of retail REITs, and Kimco has a high-quality, mixed-use portfolio concentrated in the top U.S. markets and 78% of its annual base rent comes from grocery-anchored centers.
Amid this, the company has been making efforts to boost its balance-sheet position. Per an Apr 24 announcement, the company has in excess of $2.2 billion of available liquidity, with $1.3 billion of availability on its unsecured revolving credit facility and a solid cash position of more than $900 million.
Apart from these, the company has been shedding non-core assets in sync with its portfolio-revamp strategy. While the disposition efforts are encouraging for the long term, the dilutive impact on earnings from high asset sales cannot be averted in the near term.
The Zacks Consensus Estimate for Kimco’s first-quarter revenues is currently pinned at $290.6 million — reflecting a 1.5% decline from the prior-year quarter reported figure.
In addition to the above, Kimco’s activities during the January-march quarter were inadequate to gain analyst confidence. The Zacks Consensus Estimate of 37 cents for quarterly FFO per share remained unchanged over the past month. Also, the figure remains stable, year over year.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for Kimco this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Kimco currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -1.37%.
Stocks That Warrant a Look
Arbor Realty Trust (ABR - Free Report) , scheduled to release earnings on May 8, has an Earnings ESP of +1.59% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CBL Properties (CBL - Free Report) , slated to release earnings results on May 18, currently has an Earnings ESP of +11.11% and a Zacks Rank #3.
VEREIT, Inc. , set to report quarterly numbers on May 20, currently has an Earnings ESP of +5.15% and a Zacks Rank of 3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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