) is set to report its first-quarter 2014 results on May 6, after
the closing bell. In the prior quarter, it delivered a positive
earnings surprise of 0.00%. This retail real estate investment
trust (REIT) has an expected FFO growth rate of 6.83%.
Let's see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model conclusively shows that DDR will beat
earnings because it has the right combination of two key
Positive Zacks ESP:
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, stands at +7.14%. This
is very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
DDR carries a Zacks Rank #3 (Hold). Note that stocks with Zacks
Ranks #1, 2 or 3 have a significantly higher chance of beating
This combination of DDR's Zacks Rank and Earnings ESP makes us
confident about a positive earnings beat.
We caution against stocks with Zacks Ranks #4 and 5
(Sell-rated stocks) going into the earnings announcement,
especially when the company is seeing negative estimate revisions
What is Driving the Better-than-Expected Earnings?
Improving core operating fundamentals, aggressive capital
recycling program and a sound balance sheet position with
adequate liquidity are expected to lead to a positive earnings
surprise in first-quarter 2014. Also, DDR's high end tenant base
of leading retailers - such as
Bed Bath & Beyond Inc.
) - promise bright prospects.
As a matter of fact, in the first quarter of 2014, DDR
divested 14 non-prime assets and generated $142 million from it
as its share. The generated proceeds are intended to partly fund
the buyout of 3 prime power centers in downtown Chicago, Colorado
and Northern California. Such activities bode well for DDR's
Other Stocks to Consider
DDR is not the only firm looking up this earnings season.
Other stocks in the retail REIT sector having the right
combination of the two key ingredients, which are slated to
report on May 7, are:
Kimco Realty Corporation
), with an Earnings ESP of +2.94% and a Zacks Rank #3.
Regency Centers Corporation
), with an Earnings ESP of +1.54% and a Zacks Rank #3.
FFO, a widely used metric to gauge the performance of REITs,
is obtained after adding depreciation and amortization and other
non-cash expenses to net income.
BED BATH&BEYOND (BBBY): Free Stock Analysis
DDR CORP (DDR): Free Stock Analysis Report
KIMCO REALTY CO (KIM): Free Stock Analysis
REGENCY CTRS CP (REG): Free Stock Analysis
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