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REITs' Q4 Earnings to Watch on Jan 31: SPG, EQR and BXP

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The fourth quarter earnings season for real estate investment trust (REIT) companies is now in full swing. Some important companies from this sector which have already reported results are Prologis, Inc. PLD , SL Green Realty Corp. SLG and Duke Realty Corporation DRE . Among these, Duke Realty reported better-than-expected results, but SL Green's performance missed expectations. However, Prologis reported in-line results.

Some REITs, belonging to different sub-categories, which are slated to report results on Jan 31 are Simon Property Group, Inc.SPG , Equity ResidentialEQR and Boston Properties, Inc.BXP .

The REIT space saw many key developments in the quarter. The higher chances of rate hike and political uncertainty sent the bond yields north. In Mid-December, the U.S. Federal Reserve raised 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 extremely low. According to the National Association of Real Estate Investment Trusts, despite the rate hike, the REITs are likely to show improved performance with robust equity issuance and low debt ratios.

Also a tightening monetary policy signals economic strength, raising the chances of an upward revision in rent and occupancy levels. This, in turn, results into a robust net operating income expansion. All these factors benefit REITs and may neutralize the impact of a high rate of interest.

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 three REITs set to release their fourth quarter results tomorrow:

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.

Indianapolis, IN-based Simon Property is slated to report its results before the market opens. The company has an Earnings ESP of -0.40% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here . Our model does not conclusively predict that the company will record a positive surprise (read more: Simon Property's Q4 Earnings: What's in the Cards? ).

Simon Property Group, Inc. Price and EPS Surprise

Simon Property Group, Inc. Price and EPS Surprise | Simon Property Group, Inc. Quote

Equity Residential is a Chicago, IL-based mortgage REIT which has an Earnings ESP of -1.27% and a Zacks Rank #3. Our proven model does not conclusively show that the company is likely to post a positive surprise this quarter (read more: Will Equity Residential Disappoint in Q4 Earnings? ).

Equity Residential Price and EPS Surprise

Equity Residential Price and EPS Surprise | Equity Residential Quote

Massachusetts-based Boston Properties has an Earnings ESP of +0.67% and a Zacks Rank #3. Our proven model shows that the company is likely to post a positive surprise in the fourth quarter (read more: Boston Properties Q4 Earnings: Is a Beat in Store? ).

Boston Properties, Inc. Price and EPS Surprise

Boston Properties, Inc. Price and EPS Surprise | Boston Properties, Inc. Quote

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

Simon Property Group, Inc. (SPG): Free Stock Analysis Report

Equity Residential (EQR): Free Stock Analysis Report

ProLogis, Inc. (PLD): Free Stock Analysis Report

Boston Properties, Inc. (BXP): Free Stock Analysis Report

Duke Realty Corporation (DRE): Free Stock Analysis Report

SL Green Realty Corporation (SLG): 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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