Markets
MAC

REITs' Q4 Earnings to Watch Early Next Week: MAC, KRC & More

Several companies in the real estate investment trust ("REIT") sector have already reported their fourth-quarter 2016 results. Some REITs, belonging to different sub-categories, which are expected to report results on Feb 6 are The Macerich CompanyMAC , Kilroy Realty CorporationKRC , Jones Lang LaSalle IncorporatedJLL and Two Harbors Investment Corp.TWO .

A lot of major developments kept the companies from the REIT sector on tenterhooks during the quarter. The increasing probability of a rate hike and political uncertainty raised the bond yields in the first half of the quarter. Then in mid-December, the U.S. Federal Reserve increased the key interest rates by 25 basis points to the range of 0.50-0.75%, the second hike since Dec 2015.

However, interest rates are still in a very low range. Importantly, despite the hike in rate of interest, the REITs are likely to show better performance with low debt ratios and robust equity issuance.

Also, a tightening monetary policy signals better economic prospects. This raises the chances of higher rent and occupancy levels. In other words, the likelihood of a higher growth in net operating income increases.

In fact, per a study by the commercial real estate services firm CBRE Group Inc. CBG , the U.S. economy is gradually gaining strength. In Dec 2016, wages increased 2.9% year over year, the highest in seven years. This growth trend is expected to continue in 2017.

Let's have a look at what's in store for the four REITs set to release their fourth-quarter results Monday:

For doing this, we rely on the Zacks methodology, combining a favorable Zacks Rank - Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) - and a positive Earnings ESP , to predict the chances of a beat this quarter. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Per our proprietary methodology, Earnings ESP shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. Research shows that with this combination of rank and ESP, chances of a positive earnings surprise are as high as 70% for the stocks.

Santa Monica, CA-based Macerich is expected to report its results after market close. The company has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). Our model does not conclusively predict that the company will record a positive surprise (read more: Macerich Q4 Earnings: What's in Store for the Stock? ).

Macerich Company (The) Price and EPS Surprise

Macerich Company (The) Price and EPS Surprise | Macerich Company (The) Quote

Kilroy Realty is a Los Angeles, CA-based REIT, which has an Earnings ESP of 0.00% and a Zacks Rank #4. Our proven model does not conclusively show that the company is likely to post a positive surprise this quarter.

Kilroy Realty Corporation Price and EPS Surprise

Kilroy Realty Corporation Price and EPS Surprise | Kilroy Realty Corporation Quote

Chicago-based JLL, a real estate operations firm, has an Earnings ESP of +1.28% and a Zacks Rank #4. Our proven model does not conclusively show that the company is likely to post a positive surprise this quarter.

Jones Lang LaSalle Incorporated Price and EPS Surprise

Jones Lang LaSalle Incorporated Price and EPS Surprise | Jones Lang LaSalle Incorporated Quote

New York-based Two Harbors Investment is a mortgage REIT, which has an Earnings ESP of -4.17% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here . Our proven model does not conclusively show that the company is likely to post a positive surprise this quarter.

Two Harbors Investments Corp Price and EPS Surprise

Two Harbors Investments Corp Price and EPS Surprise | Two Harbors Investments Corp Quote

Now See Our Private Investment Ideas

While the above ideas are being shared with the public, other trades are hidden from everyone but selected members. Would you like to peek behind the curtain and view them? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Two Harbors Investments Corp (TWO): Free Stock Analysis Report

Jones Lang LaSalle Incorporated (JLL): Free Stock Analysis Report

CBRE Group, Inc. (CBG): Free Stock Analysis Report

Macerich Company (The) (MAC): Free Stock Analysis Report

Kilroy Realty Corporation (KRC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

MAC KRC TWO JLL

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More