Federal Realty Investment Trust (FRT) Down 4.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Federal Realty Investment Trust (FRT). Shares have lost about 4.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Federal Realty Investment Trust 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 catalysts.
Federal Realty Beats Q2 FFO, Raises '23 View & Dividend
Federal Realty’s second-quarter 2023 FFO per share of $1.67 surpassed the Zacks Consensus Estimate of $1.62. This also marked a rise of 1.2% from the year-ago quarter’s tally of $1.65.
Results reflected healthy leasing activity and occupancy levels at its properties.
While quarterly revenues of $280.7 million improved 6.3% from the year-ago quarter’s tally, the same exceeded the Zacks Consensus Estimate of $277 million. Federal Realty generated 4.6% comparable property operating income growth, excluding lease termination fees and COVID-19 pandemic-related prior-period rents collected for the second quarter. The company has also increased its guidance for 2023 FFO per share and hiked its dividend.
Per Donald C. Wood, Federal Realty's chief executive officer, "Continued robust leasing activity demonstrates the strength of retail demand for the high-quality product that Federal Realty offers."
Quarter in Detail
On the leasing aspect, during the reported quarter, Federal Realty signed 112 leases for 602,911 square feet of retail space. On a comparable space basis, the company signed 107 leases for 576,345 square feet of space at an average rent of $35.34 per square foot. This denotes cash-basis rollover growth of 7% to 19% on a straight-line basis. It marks the highest second-quarter comparable leasing volume on record.
On the operational front, occupancy rates in the portfolio increased 80 basis points (bps) year over year to 92.8% as of Jun 30, 2023. Leased rates also increased 20 bps year over year to 94.3% as of the same date. Our estimate for the same was also 94.3%. Moreover, FRT’s comparable residential properties were 98% leased as of the same date.
Federal Realty exited the second quarter of 2023 with cash and cash equivalents of $98.06 million, up from $85.6 million recorded at the end of 2022.
Guidance
For 2023, Federal Realty increased its guidance for FFO per share in the range of $6.46-$6.58 from $6.38-$6.58 guided earlier.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
At this time, Federal Realty Investment Trust has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.
Outlook
Federal Realty Investment Trust has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Federal Realty Investment Trust (FRT) : Free Stock Analysis Report
