Why Is Regency Centers (REG) Down 11.2% Since the Last Earnings Report?

It has been about a month since the last earnings report for Regency Centers Corporation REG. Shares have lost about 11.2% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Regency Centers Beats on Q4 FFO, Revenue Estimates

Backed by better-than-expected growth in revenue, Regency Centers’ fourth-quarter 2016 core FFO per share of $0.86 came ahead of the Zacks Consensus Estimate of $0.84. Further, the results compared favorably with $0.79 reported in the year-ago quarter. Moreover, it experienced growth in SPNOI.

Total revenue for the quarter came in at $159.6 million, while adjusted revenue was $153 million, ahead of the Zacks Consensus Estimate of $148 million. The figures also compared favorably with the year-ago quarter’s total revenue of $146.2 million and adjusted revenue of $138.6 million, respectively.

For full-year 2016, Regency came up with core FFO per share of $3.29, ahead of the prior-year tally of $3.04. The performance reflects 7.8% growth in total revenue to $614.4 million.

Inside the Headlines

During the quarter, Regency’s tally for new and renewal leasing transactions reached 452, spanning 1.86 million square feet of space. Moreover, Regency’s SPNOI climbed 3.9% on a year-over-year basis, excluding termination fees, for its wholly owned properties, along with its pro-rata share of co-investment partnerships.

Rental rate growth for new leases was 21.4%, while the same for renewal leases was 9.7%. Same properties portfolio was 96.2% leased, while all of the company’s properties were 95.4% leased.

Regency’s cash and cash equivalents were $17.9 million at the end of fourth-quarter 2016, down from $40.6 million at the end of 2015. The company’s total outstanding debt was $1.64 billion, down from $1.86 billion at the end of the previous year.

Notable Portfolio Activity

During the quarter, Regency and a co-investment partner acquired Plaza Venezia in Orlando, FL, for a gross purchase price of $92.5 million. The company’s share of the gross purchase price was $18.5 million.

Further, on Nov 14, 2016, the company and Equity One, Inc. struck a deal, providing for the merger of Equity One with and into Regency. This is expected to close on or around Mar 1, 2017.

On the other hand, the company has sold one wholly owned property and one co-investment property for an aggregate gross sales price of $78.7 million, with Regency’s share being $58.7 million.

At year end, the company had 21 properties in development or under redevelopment with combined, estimated costs of $290.9 million.

Outlook

Regency updated its guidance for 2017 due to its recently disclosed debt offerings. The company now expects core FFO per share in the $3.44–$3.50 band, against the prior guided range of $3.42–$3.48.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.

Regency Centers Corporation Price and Consensus

 

Regency Centers Corporation Price and Consensus | Regency Centers Corporation Quote

VGM Scores

At this time, Regency Centers' stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with an 'C'. However, 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 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable solely for momentum based on our styles scores.

Outlook

The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Regency Centers Corporation (REG): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research