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Is Federal Realty's (FRT) Q4 Earnings Likely to Disappoint?

Federal Realty Investment TrustFRT is expected to report fourth-quarter 2016 results after market close on Feb 13. Last quarter, this retail real estate investment trust ("REIT") posted a negative surprise of 0.70%.

Federal Realty has beaten estimates in two of the four trailing quarters, with a positive average surprise of 0.01%.

Let's see how things are shaping up for this announcement.

Federal Realty Investment Trust Price and EPS Surprise

Federal Realty Investment Trust Price and EPS Surprise | Federal Realty Investment Trust Quote

Factors to Consider

Federal Realty's dependency on the local market's general economic conditions such as willingness of retailers to rent space in its shopping centers, tenant bankruptcies, lease expirations and economic environment remain concerns for it.

Also, the increasing trend in online shopping has raised competition and is negatively impacting the demand for retail real estates. Further, hike in interest rate poses a challenge for Federal Realty.

However, Federal Realty's portfolio of premium retail assets along with a diverse tenant base, positions it well for decent growth.

Earnings Whispers

Our proven model does not conclusively show that Federal Realty will beat on earnings this season. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. However, that is not the case here as you will see below.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks ESP : Both the Most Accurate estimate and the Zacks Consensus Estimate currently stand at $1.44, which translates into an Earnings ESP of 0.00%.

Zacks Rank : Federal Realty has a Zacks Rank #4 (Sell).

As it is we caution against stocks with Zacks Rank #4 or 5 (Sell-rated) going into earnings announcement, especially when the company is seeing negative estimate revisions.

Over the past 30 days, the fourth-quarter FFO per share estimate remained unchanged.

Stocks to Consider

Here are some REITs that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

CubeSmart CUBE , expected to release earnings results on Feb 16, has an Earnings ESP of +2.70% and a Zacks Rank #3.

STAG Industrial, Inc. STAG , expected to release earnings results on Feb 16, has an Earnings ESP of +2.50% and a Zacks Rank #3.

Chesapeake Lodging Trust CHSP , expected to release earnings results on Feb 22, has an Earnings ESP of + 2.17% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. 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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Federal Realty Investment Trust (FRT): Free Stock Analysis Report

Chesapeake Lodging Trust (CHSP): Free Stock Analysis Report

Stag Industrial, Inc. (STAG): Free Stock Analysis Report

CubeSmart (CUBE): Free Stock Analysis Report

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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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