On Nov 29, 2013, Zacks Investment Research upgraded
Regency Centers Corporation
) to a Zacks Rank #2 (Buy). The upgrade of this retail real
estate investment trust (REIT) came on the back of Regency's
solid third-quarter 2013 results and its strong operating
Why the Upgrade?
Regency has been witnessing rising funds from operations (FFO)
estimates thanks to decent third-quarter 2013 results and an
enhanced guidance for full-year 2013. This retail real estate
investment trust (REIT) reported third-quarter 2013 core funds
from operations (core FFO) per share of 65 cents, which beat the
Zacks Consensus Estimate by 2 cents and the year-ago quarter
figure by 3 cents.
The results were driven by better-than-expected growth in revenue
and higher net operating income. Moreover, Regency raised its
core FFO per share guidance for full-year 2013 and now expects it
in the range of $2.60 - $2.63 (prior range being $2.55-$2.60).
Regency's portfolio of shopping centers, located in high-density
markets with affluent customers, is among the best in the sector.
Moreover, with focus on best-in-class grocery anchors, including
Whole Foods Market, Inc.
) and Trader Joe's, the portfolio drives value and mitigates
operating risks. Notably, even during times of economic slump,
the grocery-anchored shopping centers have earned the reputation
of putting up a consistent performance.
Owing to these bullish factors, the tendency for an upward
estimate revision has been obvious in recent times. Over the last
30 days, the Zacks Consensus Estimate for 2013 FFO per share rose
0.8% to $2.61. The current estimate is well within the guidance
issued by the company. Moreover, for 2014, the Zacks Consensus
Estimate for FFO per share moved north 0.4% to $2.68.
Additionally, the long-term earnings growth forecast for Regency
is 4.84%. Hence, the favorable estimate revisions, driven by
positive third-quarter results and portfolio repositioning
efforts made way for the upgrade in the rank.
Other Stocks to Consider
Apart from Regency, investors interested in the retail REIT
industry may consider
Simon Property Group Inc.
) which also carries a Zacks Rank #2 (Buy).
REGENCY CTRS CP (REG): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
SAFEWAY INC (SWY): Free Stock Analysis Report
WHOLE FOODS MKT (WFM): Free Stock Analysis
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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.