BRE Properties, Inc (
, a real estate investment trust (REIT), is scheduled to report
its third quarter 2012 earnings on October 30. The current Zacks
Consensus Estimate for the third quarter is pegged at 60 cents
per share, representing a year-over-year growth of about 8.95%.
Second Quarter Recap
BRE reported second quarter 2012 fund from operations (FFO) of
$45.8 million or 59 cents per share, compared with $34.9 million
or 49 cents in the year-earlier quarter. FFO in the reported
quarter marginally beat the Zacks Consensus Estimate by a penny.
The improved quarterly performance was primarily due to increases
in same-store property-level operating results, incremental net
operating income (NOI) from newly acquired and completed
communities and a reduction in interest expense, which was
partially offset by a higher level of outstanding shares.
Total revenue during the quarter was $98.1 million versus $91.4
million in the year-ago quarter.
Agreement of Analysts
In the last 7 days, none of the analysts have revised their
earnings estimate for 2012 and 2013. This signifies that
the analysts are cautious about both the short- and long-term
earnings prospects of the company.
Magnitude of Estimate Revisions
For full-year 2012, the company expects FFO in the range of $2.32
to $2.38 per share. The Zacks Consensus Estimates for 2012 have
remained constant over the last 7 days at $2.36 per share, which
is at the higher-end of the company's guidance. For 2013, the
Zacks Consensus Estimates have also remained steady over the last
7 days at $2.55 per share.
BRE develops, acquires, and manages multi-family apartment
communities primarily in the Western U.S., where it currently
operates in three states - California, Washington and Arizona.
Despite challenging macroeconomic environment, home values in
most of the BRE markets are still among the highest in the
country, and the rent-to-own gap remains high. BRE
generally has assets in supply-constrained premium markets of the
country that have fared comparatively better than its
competitors. Consequently, the company has a strong upside
However, BRE competes with other housing alternatives such
as rental apartments, condominiums and single-family homes that
are available for rent, and new and existing condominiums and
single family homes available for sale. Consequently, the company
is under severe stress to maintain profitability.
BRE Properties currently retains a Zacks #4 Rank, which
translates into a short-term Sell rating. We are also maintaining
our long-term Neutral recommendation on the stock. One of its
Equity Residential (
holds a Zacks #2 Rank, which implies a short term Buy rating.
BRE PROPERTIES (BRE): Free Stock Analysis
EQUITY RESIDENT (EQR): Free Stock Analysis
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