Federal Realty (FRT) To Post Q1 Earnings: What's In Store?
Zacks Investment Research | Apr 30, 2017 09:20PM ET
Federal Realty Investment Trust (NYSE:FRT) is set to report first-quarter 2017 results after the market closes on May 3.
Last quarter, this retail real estate investment trust (“REIT”) delivered a positive surprise of 0.69%. Over the trailing four quarters, the company topped estimates on three occasions, with a positive average surprise of 0.36%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Federal Realty’s portfolio of premium retail assets – mainly situated in the major coastal markets from Washington, D.C. to Boston, San Francisco and Los Angeles – along with a diverse tenant base, positions it well for decent growth.
However, mall traffic continues to dwindle amid a rapid shift in customers’ shopping preferences with non-store sales rising significantly. This has become a pressing concern for retail REITs like Federal Realty. Moreover, the company expects first-quarter funds from operations (“FFO”) per share to be lower sequentially. This is because of an increase in its anchor repositioning strategies.
Particularly, amid a fast changing retail environment, the company is making concerted efforts to reposition, redevelop and re-merchandise its portfolio. This includes an upgrade of the tenant mix. While such efforts are a strategic fit for the long term, their short-term adverse impact on earnings cannot be bypassed.
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. The Zacks Consensus Estimate of FFO per share for the to-be-reported quarter remained unchanged over the past 60 days.
Earnings Whispers
Our proven model does not conclusively show that Federal Realty will beat on earnings this season. This is because a stock needs to have both a positive Original post
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