Aimco (AIV) Q1 Earnings: What's In Store For The Stock?
Zacks Investment Research | Apr 23, 2017 10:04PM ET
Apartment Investment & Management Co. (NYSE:AIV) – commonly known as Aimco – is slated to report first-quarter 2017 results on Apr 27, after the market closes.
Last quarter, this residential real estate investment trust (“REIT”) delivered an in-line performance. Results reflected conventional same-store property net operating (NOI) growth, higher contribution from development, redevelopment and acquisition activities, along with lower casualty losses. On the other hand, the company experienced loss of income from the sale of apartment communities and rise in interest expenses.
However, Aimco has a mixed earnings surprise history. Over the trailing four quarters, the company surpassed the Zacks Consensus estimate on two occasions, reported in-line numbers in one, and missed the mark in another. Overall, Aimco delivered an average positive surprise of 1.34%. This is depicted in the chart below.
Apartment Investment and Management Company Price and EPS Surprise
Let’s see how things are shaping up for Aimco prior to this announcement.
Factors to Consider
Aimco has a solid portfolio diversified both in terms of geography and price point. This raises hopes of a relatively lesser impact on the top line in the first quarter, despite new supply in various markets. The company is also revamping its portfolio through property sales and re-investing the proceeds in select apartment homes with higher rents, superior margins and higher-than-expected growth. This augurs well for long-term growth. Aimco’s balance sheet is also projected to improve.
However, even though it is a strategic fit on part of the company to sell non-core assets and buy property in higher-growth in-fill areas, the dilutive impact on earnings from such asset dispositions cannot be avoided either in the near term. In addition, there is stiff competition in its markets, thus, any robust improvement in rates and occupancy is unlikely.
For first-quarter 2017, Aimco projects pro forma funds from operation (“FFO”) per share in the band of 55–59 cents. The Zacks Consensus Estimate for the same is currently pegged at 58 cents.
Hence, prior to the first-quarter earnings release, there is lack of any solid catalyst for becoming overtly optimistic about the company’s business activities and prospects. As such, the Zacks Consensus Estimate of FFO per share for the to-be-reported quarter remained unchanged at 58 cents over the past 60 days.
In addition, over the past three months, shares of Aimco underperformed the Zacks categorized Zacks Investment Research
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