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REITs Queued for Q1 Earnings on April 26: SBAC, ARE and More

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We are in the middle of the current reporting cycle and the real estate investment trust (REIT) space is buzzing with activity, with a number of earnings releases lined up for next week.

Particularly, on Monday, Apr 26, among others, tower REIT SBA Communications Corporation SBAC, office REIT Alexandria Real Estate Equities, Inc. ARE with particular focus on collaborative life science, agtech and technology campuses, residential REIT Sun Communities, Inc. SUI and mortgage REIT AGNC Investment Corp. AGNC will release their quarterly numbers.

Per the Zacks industry classification, the REIT industry is part of the broader Finance sector. For the Finance sector, first-quarter earnings are expected to be up a whopping 90.8% on 5.5% higher revenues, per the latest Earnings Trends, since the group’s year-earlier results were dragged down by big loan-loss reserves at the banks as the pandemic got underway.

However, REITs invest in all types of properties, from residential, industrial, offices, malls to hospitals, hotels and data centers and several others. Moreover, the pandemic-induced economic disruption and its impact have widely varied across different property types. Therefore, underlying asset categories as well as location of properties play a crucial role in determining REITs’ performance.

Let’s see what’s in the offing for the five above-mentioned REITs, which are scheduled to announce quarterly results on Monday.

SBA Communications is scheduled to report after market close. The tower REIT has been making continued efforts to expand its tower portfolio in select markets, with high-growth characteristics on the back of acquisitions and development. This positioned it well to benefit from the high demand for towers, spurring from significant growth in the overall network utilization amid the work-from-home wave.

The Zacks Consensus Estimate for first-quarter site-leasing revenues, which account for the lion’s share of the total revenues, is pegged at $501 million, indicating a year-over-year rise of 1.8%. Revenues from site-development operations are estimated to be $34.38 million, indicating an increase of 39.2% from the year-ago period. The consensus estimate for first-quarter total revenues is pegged at $535.8 million. This calls for year-over-year growth of 3.6%. The Zacks Consensus Estimate of $2.45 for the quarterly FFO per share also suggests year-over-year growth of 7.5%.

SBA Communications has the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an FFO beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Particularly, the Earnings ESP for SBA Communications is +0.16% and the stock currently carries a Zacks Rank #3.

(Read more: How Will SBA Communications Fare in Q1 Earnings?)

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The chart below shows the company’s earnings surprise over the trailing four quarters.

SBA Communications Corporation Price and EPS Surprise

SBA Communications Corporation Price and EPS Surprise
SBA Communications Corporation Price and EPS Surprise

SBA Communications Corporation price-eps-surprise | SBA Communications Corporation Quote

Alexandria Real Estate is slated to announce results after the closing bell. This REIT is anticipated to have witnessed healthy leasing activity, decent rental rate growth and occupancy during the quarter under review. This is because, the company’s properties and its tenants have become indispensable, amid the heightening need for effective diagnostics, therapies and vaccines to fight the ongoing health crisis. The company has Class A properties in AAA locations. With high demand, its ownership of such premium properties in strategic cluster locations is likely to have boosted occupancy levels and rent growth during the March-end quarter.

The Zacks Consensus Estimate for the first-quarter FFO per share is currently pinned at $1.85, calling for a 1.65% increase from the prior-year period.

Our proven model does not conclusively predict a positive surprise in terms of FFO per share for the REIT this season, as it currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

(Read more: Key Factors to Impact Alexandria This Earnings Season)

The chart below shows the company’s earnings surprise over the last four quarters.

Alexandria Real Estate Equities, Inc. Price and EPS Surprise

Alexandria Real Estate Equities, Inc. Price and EPS Surprise
Alexandria Real Estate Equities, Inc. Price and EPS Surprise

Alexandria Real Estate Equities, Inc. price-eps-surprise | Alexandria Real Estate Equities, Inc. Quote

Sun Communities, Inc. will report results after market close. Our proven model does not conclusively predict a positive surprise in terms of FFO per share for the REIT this season, as it currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

This Southfield, MI-based REIT is engaged in ownership, operation or enjoys stake in manufactured housing and recreational vehicle communities located across 39 states throughout the United States, and Ontario, Canada. The Zacks Consensus Estimate of $1.16 for the first-quarter FFO per share calls for a 4.9% decrease year on year.

Over the past four quarters, the company’s FFO per share topped the Zacks Consensus Estimate on three occasions and missed in the other, the average beat being 3.45%.The chart below depicts the company’s surprise history over the past four quarters.

Sun Communities, Inc. Price and EPS Surprise

Sun Communities, Inc. Price and EPS Surprise
Sun Communities, Inc. Price and EPS Surprise

Sun Communities, Inc. price-eps-surprise | Sun Communities, Inc. Quote

AGNC Investment Corp. is scheduled to release results after the closing bell. In the first quarter, dual benefits of low funding costs and continued Fed purchases enhanced the attractiveness of Agency mortgage backed securities (MBS) investment, thereby, driving valuations.This said, with $65.1 billion of Agency MBS in its investment portfolio (as of Dec 31, 2020), AGNC Investment is likely to have enjoyed attractive risk-adjusted returns within the fixed income markets and benefit from spread tightening during the first quarter. Also, the strong tailwinds for agency MBS are expected to have helped the company increase its investment in agency MBS.

Moreover, high origination volume and Fed purchases continue to shape an ideal backdrop for roll specialness, and this is anticipated to have driven the company’s first-quarter earnings.

For the March-end quarter, adjusted net interest and dollar roll income estimate is pegged at $412 million, which calls for year-over-year growth of 15.4%. The Zacks Consensus Estimate of 64 cents for quarterly net spread and dollar roll income per common share suggests a rise of 12.3% from the year-ago quarter.

Our proven model does not show that AGNC Investment is likely to beat estimates this quarter as it currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

(Read more: Key Factors to Impact AGNC Investment Q1 Earnings)

The chart below depicts the company’s earnings surprise over the preceding four quarters.

AGNC Investment Corp. Price and EPS Surprise

AGNC Investment Corp. Price and EPS Surprise
AGNC Investment Corp. Price and EPS Surprise

AGNC Investment Corp. price-eps-surprise | AGNC Investment Corp. Quote

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AGNC Investment Corp. (AGNC) : Free Stock Analysis Report

Sun Communities, Inc. (SUI) : Free Stock Analysis Report

Alexandria Real Estate Equities, Inc. (ARE) : Free Stock Analysis Report

SBA Communications Corporation (SBAC) : Free Stock Analysis Report

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