REITs To Watch For Earnings On Oct 25: BXP, EQR, LPT, UDR
Zacks Investment Research | Oct 23, 2016 10:29PM ET
We have entered into one of the busiest weeks of the Q3 earnings season for the real estate investment trust (REIT) industry. Companies like Boston Properties, Inc. (NYSE:BXP) , Equity Residential (NYSE:EQR) , UDR Inc. (NYSE:UDR) and Liberty Property Trust (NYSE:LPT) have lined up their earnings releases on Oct 25.
No doubt, the sentiments have been positive so far, with the top-notch REITs like Prologis, Inc. (NYSE:PLD) and SL Green Realty Corp. (NYSE:SLG) rendering better-than-expected performances. However, despite broadly benefiting from the persistent low-rate environment for their high debt-dependence nature, individual market dynamics of the underlying asset category play a pivotal role in defining the REIT’s performance.
Per an .
However, this stock has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, as shown in the chart below:
BOSTON PPTYS Price and EPS Surprise
Will Equity Residential Earnings Disappoint in Q3? )
Moreover, though the assets sale might help the company to focus exclusively on its core, high-density urban markets over the long term, the earnings dilution impact from such a move would be impossible to avoid in the near term.
This Zacks Rank #3 stock also has an Earnings ESP of 0.00% and is less likely to surpass estimates in the third quarter. Moreover, the company has met estimates in two and missed on the other two occasions, over the trailing four quarters. The graph below depicts the surprise history of the company.
EQUITY RESIDENT Price and EPS Surprise
Is UDR Inc. Poised for a Beat This Earnings Season? )
This Zacks Rank #3 stock has an Earnings ESP of 2.22% and we expect this stock to beat expectations when it reports its third-quarter 2016 results after the closing bell tomorrow.
Notably, over the trailing four quarters, the company has met estimates in three occasions and exceeded expectation in the other. This is depicted in the graph below.
Liberty Property Trust is focused on industrial portfolio expansion amid favorable demand supply dynamics. The company has been making concerted efforts to divest its non-core assets and utilize the proceeds for gaining preferred properties across the U.S.
Recently, the company announced the closure of the sale of 108 properties in five markets, for $969 million. Majority of them were suburban offices and flex non-core assets. In fact, with this sale, its share of total dispositions reached $1.2 billion so far this year. While such moves are a strategic fit for the long term, the near-term dilution effect of sale of assets on earnings is unavoidable.
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This Zacks Rank #4 (Sell) stock presently has an Earnings ESP 0.00%. This reduces the chances of any positive surprise in the third quarter.
Moreover, we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Yet, this stock has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, as shown in the chart below:
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