Duke Realty Hits New 52-Week High on Strong Portfolio Growth - Analyst Blog

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Shares of Duke Realty Corporation ( DRE ) touched a new 52-week high of $18.67 on Aug 19. Closing the session at $18.48, the stock returned 32.5% in a year's time. The trading volume for the session was 1,762,930 shares.

Despite the strong price appreciation, this Zacks Rank #3 (Hold) stock has plenty of upside left, given the positive estimate revisions witnessed over the past 60 days. Further, long-term expected earnings per share growth rate for this real estate investment trust (REIT) presently stands at 4.1%.

Growth Drivers

The recent spate of portfolio-expansion efforts and strong second-quarter 2014 results primarily drove the stock price.

On Aug 18, Duke Realty announced a new industrial development project on an 18.1 acre site at 1341 Enterprise Drive in I-55 submarket in Romeoville. Just a week prior to this, the real estate investment trust (REIT) announced a joint venture with Browning Investments for development of a new industrial building in AllPoints Midwest. Improving fundamentals in the U.S. industrial market is aiding Duke Realty in accomplishing its portfolio-expansion activities.

On Jul 30, Duke Realty came out with second-quarter 2014 funds from operations (FFO) of 30 cents per share, beating the Zacks Consensus Estimate by a penny. Further, FFO came in 3 cents above the prior-year quarter figure. Results were driven by a rise in revenues and occupancy growth.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for 2014 has inched up 0.9% to $1.17 per share. For 2015, the estimate moved up 0.8% to $1.24 per share over the same time frame.

Some better-ranked REIT stocks include Ashford Hospitality Trust, Inc. ( AHT ), Government Properties Income Trust ( GOV ) and W. P. Carey Inc. ( WPC ). All these stocks carry a Zacks Rank #1 (Strong Buy).

Note: 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.

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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 Nasdaq, Inc.

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

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