DDR Soars to a New 52-Week High

Zacks

Shares of DDR Corp. (DDR) reached a new 52-week high, touching $19.03 in the first half of the trading session on May 7. The closing price of this retail real estate investment trust (:REIT) on May 7 was $18.91, representing a solid year-to-date return of 20.6%. The trading volume for the session was 2.03 million shares.

Despite hitting its 52-week high, this Zacks Rank #2 (Buy) stock may not sustain this momentum going forward based on its current estimates revision trends. However, the company has strong fundamentals and expected year-over-year earnings growth of 6.71% for 2013.

Factors to Consider

Impressive first-quarter 2013 results on the back of its consistently strong portfolio restructuring activity as well as successful execution of its long-term strategy of improving the balance sheet by reducing leverage – were the primary growth drivers for DDR.

However, DDR has a significant development pipeline, which increases its operational risks.In addition, excess retail space in a number of its markets and the rise in consumer purchases through catalogs and the Internet could hurt the demand for it’s’ properties.

On Apr 30, DDR reported first-quarter 2013 operating FFO (funds from operations) per share of 27 cents. This was in line with the Zacks Consensus Estimate and surpassed the year-ago figure of 24 cents. Strategic acquisitions made in the past two years aided the year-over-year growth.

Moreover, DDR has delivered positive earnings surprises in 2 of the last 4 quarters with an average beat of 4.01%.

Estimate Revisions

Over the last 30 days, the Zacks Consensus Estimate for full-year 2013 FFO remained unchanged at $1.10. For 2014, the Zacks Consensus Estimate decreased 0.8% to $1.17 per share.

Other better performing REITs include the Host Hotels & Resorts Inc. (HST), Public Storage (PSA) and Acadia Realty Trust (AKR). All these stocks carry a Zacks Rank #2.

Note: Funds from operations, a widely accepted and reported measure of REITs performance, are derived by adding depreciation, amortization and other non-cash expenses to net income.

Read the Full Research Report on DDR

Read the Full Research Report on HST

Read the Full Research Report on PSA

Read the Full Research Report on AKR

Zacks Investment Research



More From Zacks.com
View Comments