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Duke Realty Reaches 52-Week High - Analyst Blog

Posted
3/18/2013 10:50:00 AM
By: Zacks.com
Referenced Stocks:BMR;CBG;DRE;HIW

Shares of Duke Realty Corporation ( DRE ) reached a 52-week high of $17.02 at the end of the trading session on Friday, Mar 15, 2013. Notably, this was higher than Duke Realty's previous 52-week high of $16.65, achieved on Mar 8. The stock gained momentum after reporting a decent fourth quarter 2012 results.  

The closing price of this real estate investment trust (REIT) on Mar 15, 2013 represents a solid year-to-date return of 22.5%. The average trading volume over the last 3 months was 4.7 million shares.

Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock has plenty of upside left given its strong estimate revisions over the last 30 days.

Growth Drivers

Duke Realty reported mixed fourth quarter 2012 results with core FFO standing in line and revenues beating the Zacks Consensus Estimate. Though the company benefited from portfolio repositioning activity, short-term revenue headwinds remained a matter of concern.

On Jan 30, Duke Realty reported fourth quarter 2012 core FFO (funds from operations) of 27 cents per share, in line with the Zacks Consensus Estimate but it lagged the year-ago figure by 3 cents. The year-over-year decrease reflected a reduction in income from service operations that were driven by lower third-party construction fees. In addition, short-term dilution effect, arising from the repositioning moves, added to the woes.

Moreover, Duke Realty's recent move of strengthening its fundamentals through a public offering of senior unsecured notes worth $250 million, acted as a major growth driver.

Estimate Revisions Show Potency

Over the last 30 days, 1 estimate for 2013 has been revised upward, lifting the Zacks Consensus Estimate by 0.9% to $1.08 per share. On the other hand, 1 estimate for 2014 also moved higher, but the Zacks Consensus Estimate remained intact at $1.12 per share.

Last week, a number of REITs reached 52-week high. BioMed Realty Trust Inc. ( BMR ) , reached 52-week high of $21.92 on Mar 14, 2013. Also, Highwoods Properties Inc. ( HIW ) and CBRE Group Inc. ( CBG ) reached 52-week highs of $39.08 and $25.45 on Mar 13 and Mar 12, respectively.

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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