Real estate investment trust ("REIT") Vornado Realty TrustVNO is expected to report fourth-quarter 2016 results on Feb 13, after market close.
Last quarter, Vornado reported a negative surprise of 3.12%. In the trailing four quarters, the company missed estimates on three occasions and recorded a positive surprise in one. The average negative surprise for the last four quarters was 3.28%.
Let's see how things have shaped up for this announcement.
Vornado Realty Trust Price and EPS Surprise
Factors to Consider
Vornado's Class A office properties, concentrated over a few select high barrier-to-entry geographic markets offer the company huge growth prospects.
During the fourth quarter, Vornado's Board of Trustees approved a tax-free spin-off of its Washington, DC business. Following the $4.8 billion transaction, Vornado will turn into a New York-based office and retail REIT with 18.7 million square feet of Class A offices properties in Manhattan, 3.1 million square feet high-quality retail assets in Manhattan, and prime franchise assets in San Francisco and Chicago.
Nevertheless, as part of its portfolio-repositioning efforts, Vornado is aggressively disposing its assets. Though such efforts to streamline its business are commendable, the earnings dilutive effects of these moves cannot be denied.
Overall Vornado's performance during the quarter was inadequate to win analysts' confidence. As a result, the Zacks Consensus Estimate for the quarter remained unchanged over the last seven days.
Our proven model does not conclusively show that Vornado 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 $1.31, which translates into an Earnings ESP of 0.00%.
Zacks Rank : Vornado's Zacks Rank #3, when combined with a 0.00% Earnings ESP makes surprise prediction difficult.
Note that 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.
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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