On Apr 4, 2014, we issued an updated research report on
Federal Realty Investment Trust
), a Rockville, MD-based retail real estate investment trust
On Feb 11, 2014, Federal Realty reported fourth-quarter 2013
results with core FFO (funds from operations) per share of $1.18,
exceeding the year-ago figure by 7 cents and in line with the
Zacks Consensus Estimate. Decent results came on the back of
notable leasing activity, rent escalations and improved
same-store portfolio performance. Also, Federal Realty raised its
2014 FFO per share outlook.
We believe Federal Realty's expansion strategy has strong
potential and promises steady income growth in the long run.
Moreover, the company's portfolio of high quality shopping
centers along with the diversified tenant base comprising grocery
stores and low-end discount retailers -- such as
Wal-Mart Stores, Inc.
) -- position it well for growth.
Although the significant construction pipeline of Federal
Realty bodes well for long-term growth, it increases operational
risks and tends to drag margins in the near term. Furthermore,
rising online sales that adversely affect the demand for retail
space remains a concern and an anticipated increase in interest
rate may dent its financial results going forward.
Over the last 30 days, the Zacks Consensus Estimate for 2014
FFO per share remained stable at $4.92. On the other hand, for
2015, it moved north by 2 cents to $5.37 per share. The stock
currently has a Zacks Rank #3 (Hold).
Stocks that Warrant a Look
Better-ranked stocks in the retail REIT space include
Simon Property Group Inc.
). It currently carries a Zacks Rank #2 (Buy).
FFO, a widely used metric to gauge the performance of REITs,
are obtained after adding depreciation, amortization and other
non-cash expenses to net income.
FED RLTY INV (FRT): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
TARGET CORP (TGT): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis
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