Shares of Duke Realty Corporation (DRE) reached a new 52-week high, touching $20.54 on Dec 24. However, the stock closed the session a little below at $20.46. The closing price still reflected a solid return of 43.2% within a year. The trading volume for the session was 784,334 shares.
Despite the strong price appreciation, this Zacks Rank #2 (Buy) stock has plenty of upside left, given the positive estimate revisions it witnessed over the past 60 days. Further, the long-term expected earnings per share growth rate expected for this equity real estate investment trust (“REIT”) now stands at 4.8%.
Growth Drivers
Duke Realty’s decent third-quarter 2014 results along with growth in same-property net operating income primarily drove the stock price.
On Oct 29, Duke Realty came out with third-quarter 2014 funds from operations (FFO) of 30 cents per share, in line with the Zacks Consensus Estimate. The reported figure was 2 cents higher than the prior-year quarter figure. A notable rise in the same-property net operating income and occupancy gains were the tailwinds.
In third-quarter 2914, same-property net operating income growth of grew at 6% as compared to the quarter ended Sep 30, 2013 and 3.8% as compared to the twelve months ended Sep 30, 2013. Further, Duke Realty raised the lower end of its 2014 core FFO guidance to $1.17–$1.19 from $1.15–$1.19.
Estimate Revisions Show Potency
Over the last 60 days, the Zacks Consensus Estimate for 2014 has advanced 0.9% to $1.18 per share. For 2015, the estimate moved up around 0.8% to $1.25 per share over the same time frame.
Some top-ranked stocks in this space include Ashford Hospitality Trust, Inc. (AHT), Corrections Corporation of America (CXW) and Arbor Realty Trust Inc. (ABR). While both Ashford Hospitality Trust and Corrections Corporation sport a Zacks Rank #1 (Strong Buy), Arbor Realty Trust holds the same Zacks Rank as Duke Realty.
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation, amortization and other non-cash expenses to net income.
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