AvalonBay Communities Inc.
) - an apartment real estate investment trust (REIT) - is
expected to beat expectations when it reports third-quarter 2013
results after the closing bell tomorrow, Wednesday, Oct 23.
Why a Likely Positive Surprise?
Our proven model shows that AvalonBay is likely to beat
earnings since it has the appropriate combination of two key
Positive Zacks ESP:
, which represents the difference between the Most Accurate
Estimate and the Zacks Consensus Estimate, is +2.53%. This
indicates a likely positive earnings surprise.
Zacks Rank #3 (Hold):
AvalonBay's Zacks Rank #3 increases the predictive power of its
ESP. The combination of its Zacks Rank and Earnings ESP makes us
confident of a positive earnings surprise in the to-be-reported
Stocks with a Zacks Ranks of #1, #2 and #3 have a
significantly higher chance of beating the earnings. The sell
rated stocks (#4 and #5) should never be considered going into an
Key Earnings Drivers
AvalonBay's Class A assets located in some of the premium
markets of the nation enable it to generate steady rental
revenues. Moreover, the company, which along with
) closed the Archstone acquisition in February, continues to aim
for expansion in the high barrier-to-entry regions of the U.S.
Also, its decent operating platform and growth prospects in the
multifamily sector keep us optimistic. Consequently, the company
has been performing favorably and has delivered an average
earnings surprise of 0.25% over the last four quarters.
In addition, during the third-quarter, AvalonBay reaped about
$396.2 million from the unsecured notes issue. The company
planned to use it for paying off the outstanding debt and for
other corporate needs. This activity strengthens the AvalonBay's
liquidity position and is thus notable.
Given the improving market fundamentals during the third
quarter, we expect the company to post decent quarterly results
with healthy trends in rental rates and occupancy levels.
Other Stocks to Consider
AvalonBay is not the only stock that is expected to perform
well this earnings season. We also observe that there are other
REITs, which are likely to beat earnings.
SL Green Realty Corp.
) has an Earnings ESP of +1.56% and a Zacks Rank #2 (Buy). The
company is scheduled to report its earnings on Oct 23, after the
) has an Earnings ESP of +2.44% and a Zacks Rank #3 (Hold). The
company is scheduled to report its earnings on Oct 23, before the
AVALONBAY CMMTY (AVB): Free Stock Analysis
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PROLOGIS INC (PLD): Free Stock Analysis
SL GREEN REALTY (SLG): Free Stock Analysis
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