General Growth Properties Hits New High - Analyst Blog

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Shares of General Growth Properties, Inc. ( GGP ) reached a new 52-week high, touching $23.87 during the trading session on May 13, as it gained momentum after reporting strong first-quarter 2014 results. The closing price of $23.49 of this retail real estate investment trust (REIT) reflected a strong year-to-date return of 18.0%. The trading volume for the session was around 3.1 million shares.

Despite its strong price appreciation, this Zacks Rank #2 (Buy) stock has plenty of upside left, given the improving retail market fundamentals, uptick in 2014 guidance and its expected year-over-year funds from operations (FFO) per share growth of 12.9% for 2014.

Growth Drivers

Consistent with its winning streak, General Growth Properties came up with encouraging results yet again in the first quarter on the back of improved operational performances. Particularly, the company's focus on owning high-quality retail properties in the U.S. bodes well for its long-term growth. Also, General Growth Properties' efforts to combat the competitive pressure arising from increasing online shopping promises bright prospects.

Notably, in April, the company collaborated with RetailMeNot, Inc. ( SALE ) for availing digital coupon facilities across its properties, which is encouraging. Also, in December, General Growth Properties teamed up with Deliv to offer same-day delivery service to retailers. These deals are poised to boost the company's top-line growth, going forward.

On Apr 28, 2014, General Growth Properties reported first-quarter 2014 FFO per share of 31 cents, which exceeded the Zacks Consensus Estimate by a penny and the year-ago quarter figure by 6 cents. This was mainly driven by rise in same store net operating income and increase in initial rental rates. Encouragingly, the company raised its 2014 FFO per share guidance to the range of $1.30 - $1.32, up from $1.27 - $1.31 guided earlier.

Over the last 7 days, the Zacks Consensus Estimate for full-year 2014 and 2015 FFO per share remained stable at $1.31 and $1.43 per share, respectively.

Other Stocks to Consider

Apart from General Growth Properties, other REITs that reached 52-week highs on May 13 include Essex Property Trust Inc. ( ESS ) and Equity Residential ( EQR ).

Note: Funds from operations, a widely accepted and reported measure of REITs performance, are derived by adding depreciation, amortization and other non-cash expenses to net income.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: EQR , ESS , GGP , SALE

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