It has been about a month since the last earnings report for Mack-Cali Realty (CLI). Shares have added about 3.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Mack-Cali due for a pullback? 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.
Mack-Cali's Q4 FFO Meets, Revenues Miss Estimates
Mack-Cali’s fourth-quarter 2018 core FFO per share of 45 cents came in line with the Zacks Consensus Estimate. However, the figure compares unfavorably with the year-ago tally of 50 cents.
Quarterly revenues of $132.9 million missed the Zacks Consensus Estimate of $133.7 million. The reported tally also declined from the year-ago number of $143.5 million.
As of Dec 31, 2018, Mack-Cali’s consolidated core office properties were 83.2% leased, which shrunk 100 basis points (bps) from the prior-quarter end. Same-store cash revenues for the office portfolio descended 5.2%, while same-store cash NOI was down 2.1% year over year.
During the reported quarter, Mack-Cali executed 34 lease deals, spanning around 358,624 square feet of space, at the company’s consolidated in-service commercial portfolio. This comprised 39.4% for new leases, and 60.6% for lease renewals and other tenant-retention deals.
In addition, for the core portfolio, rental rate roll up for fourth-quarter 2018 deals was 2.9% on a cash basis. For new transactions, rental rate roll up was 2.1% on a cash basis, while for renewals and other tenant retention deals, it was 3.2% on a cash basis.
The company’s residential stabilized operating portfolio was 95.9% leased at the end of the quarter. However, same-store NOI edged down 1.9% year over year in the quarter under review.
Mack-Cali reiterated its 2019 projected core FFO per share at $1.57-$1.67.
The company projects office occupancy (year-end % leased) of 79-83% and dispositions (excluding flex) of $155-$180 million for full-year 2019.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted 5.13% due to these changes.
Currently, Mack-Cali has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, 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.
Mack-Cali has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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