Shares of Regency Centers Corporation (REG) reached a 52-week high of $57.14 during the trading session on Friday, Aug 15, after gaining momentum on solid second-quarter 2014 results. The closing price of $56.93 of this retail real estate investment trust (:REIT) represents a robust year-to-date return of over 26%. The average trading volume for the session was nearly 0.9 million shares.
Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock has plenty of upside left, given the company’s healthy operating portfolio performance and expected long-term growth of 5.7%.
Regency came up with another encouraging quarterly performance, with a positive earnings surprise of around 6.0% in second-quarter 2014. Aided by higher revenue growth, the company’s core funds from operations (core FFO) per share of 71 cents exceeded both the Zacks Consensus Estimate and the year-ago quarter figure by 4 cents. Encouragingly, the company raised its core FFO per share outlook for 2014 and boosted investors’ confidence.
Also, Regency’s unsolicited offer to buy AmREIT Inc. (AMRE) for $22 per share, made in early July 2014, is noteworthy. This acquisition, upon materialization, would help Regency’s Texas shopping center portfolio to significantly increase in size and will pave the way for significant opportunities to fuel its same property net operating income.
Notably, Regency, which has surprised in the last four quarters as well, primarily focuses on building a premium portfolio of grocery-anchored shopping centers. Such centers are usually necessity driven and drive a dependable traffic.
Estimates Revision Show Potency
Over the last 30 days, the Zacks Consensus Estimate for 2014 FFO per share climbed up by 6 cents to $2.78. Also, for 2015, it jumped by 4 cents to $2.90.
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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.