Federal Realty Hits 52-Week High - Analyst Blog

Shares of Federal Realty Investment Trust ( FRT ) touched a 52-week high of $121.01 towards the end of the trading session on Monday, Jun 2, 2014, as it gained momentum following strong first-quarter 2014 results. The closing price of $120.86 of this retail real estate investment trust (REIT) represented a robust year-to-date return of 20.6%. The average trading volume for the session was around 0.29 million shares.

Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock has plenty of upside left, given the improving retail market fundamentals and expected year-over-year funds from operations (FFO) per share growth of 6.72% for 2014.

Growth Drivers

Federal Realty bounced back with its earnings surprise streak in first-quarter 2014, after posting in-line results in the prior quarter, thanks to strong core operating properties' performance. In particular, the company's portfolio of Class A shopping centers along with the diversified tenant base, comprising grocery stores and low-end discount retailers, position it well to maintain the upward trend.

Moreover, Federal Realty has been capitalizing on expansion opportunities in premium markets, which generate high-income growth and long-term value creation potential. In connection to this, the acquisition of New Jersey-based premium assets in the quarter and the leasing and development progress at 3 properties - Pike & Rose, Assembly Row and The Point - bode well for Federal Realty.

On May 8, 2014, Federal Realty posted first-quarter 2014 funds from operations (FFO) per share of $1.21, surpassing the Zacks Consensus Estimate of $1.19 by 1.7% and the year-ago quarter figure of $1.14 by 6.1%. Higher revenues, rent escalations and improved same-store portfolio performance aided the results.

Over the last 30 days, the Zacks Consensus Estimate for 2014 and 2015 remained stable at $4.92 and $5.36 per share, respectively.

Other Stocks to Consider

Apart from Federal Realty, other retail REITs that reached 52-week highs on Jun 2 include Simon Property Group Inc. ( SPG ), General Growth Properties, Inc ( GGP ) and The Macerich Company ( MAC ).

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 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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