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Taubman Centers (TCO) Up 2.6% Since Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Taubman Centers, Inc.TCO . Shares have added about 2.6% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is TCO due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Taubman Centers' Q4 FFO and Revenues Beat Estimates

Taubman Centers reported fourth-quarter 2017 adjusted FFO per share of $1.03 that surpassed the Zacks Consensus Estimate of $1.02. The figure also came 2% above the year-ago tally of $1.01.

Total revenues for the quarter came in at $172.2 million, beating the Zacks Consensus Estimate of $165 million. Revenues were also up 3.6% from the prior-year quarter.

The quarter experienced higher occupancy and rent per square foot.

For full-year 2017, Taubman's adjusted FFO per share were $3.70, reflecting growth of 3.4% from the year-ago figure of $3.58. Total revenues for the full year came in at $629.2 million, reflecting growth of 2.7% year over year.

Quarter in Detail

Comparable center net operating income (NOI) climbed 0.1% for the quarter. Average rent per square foot in comparable centers came in at $61.35, up 0.6% from the prior-year quarter. For the period ended Dec 31, 2017, the trailing 12-month releasing spreads per square foot were 5%.

Moreover, comparable center mall tenant sales per square foot increased up 3.2% in the quarter. Further, the company's 12-month trailing comparable center mall tenant sales per square foot was $810, marking an increase of 2.3%.

As of Dec 31, 2017, leased space in comparable centers was 96%. Moreover, ending occupancy in comparable centers was 95% on Dec 31, 2017, reflecting a rise of 0.3% from the prior year.

Liquidity

Taubman Centers exited the fourth quarter with cash and cash equivalents of $42.5 million, up from $40.6 million at year-end 2016.

Guidance

Taubman Centers introduced guidance for 2018. The company projects 2018 FFO per share in the range of $3.72-$3.86.

The full-year FFO per share guidance is backed by assumptions of comparable center NOI growth of about 2-3% for the year. Also, the guidance does not include any future costs that may be incurred related to shareowner activism.

How Have Estimates Been Moving Since Then?

In the past month , investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to three lower.

Taubman Centers, Inc. Price and Consensus

Taubman Centers, Inc. Price and Consensus | Taubman Centers, Inc. Quote

VGM Scores

At this time, TCO has a subpar Growth Score of D, though it is lagging a bit on the momentum front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate investors will probably be better served looking elsewhere.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, TCO has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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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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