Shares of Regency Centers Corporation (REG) touched a new 52-week high of $65.11 on Dec 29, 2014. However, the stock closed the session at $64.83, reflecting a solid return of 43.2% in a year’s time. The trading volume for the session was 681,436 shares.
Despite the strong price appreciation, this Zacks Rank #2 (Buy) stock still has plenty of upside left, given the positive estimate revisions it witnessed over the past 30 days. Further, the expected long-term earnings per share growth rate for this retail real estate investment trust (“REIT”) now stands at 6.38%.
Growth Drivers
In mid-December, Regency updated its 2014 earnings guidance. The retailer also provided initial full-year earnings guidance for 2015. The company increased the 2014 core funds from operations (“FFO”) per share guidance to $2.81–$2.83 from the earlier projection of $2.80–$2.83. Similarly, it raised the 2014 FFO per share guidance to $2.88–$2.91 from the previous range of $2.80–$2.83.
Regency expects the 2015 core FFO per share and FFO per share in the ranges of $2.91–$2.97 and $2.89–$2.95, respectively. This rise in earnings outlook might have driven the latest surge in share price.
On Nov 3, Regency reported third-quarter 2014 core FFO of 71 cents per share, which beat the Zacks Consensus Estimate by 2 cents and the prior-year quarter figure by 6 cents. Encouragingly, the REIT increased its outlook range for 2014 core FFO per share to $2.80–$2.83 from $2.75–$2.80 estimated earlier.
Echoing similar sentiments, the Zacks Consensus Estimate for both 2014 and 2015 moved north. Specifically, over the last 30 days, the estimate for 2014 edged up 0.4% to $2.82 per share, while that for 2015 advanced 0.7% to $2.95 per share.
Other Stocks to Consider
Some top-ranked stocks in this space include American Assets Trust, Inc. (AAT), CBL & Associates Properties Inc. (CBL) and Kimco Realty Corp. (KIM). All these stocks hold a Zacks Rank #2, same as Regency.
Note: 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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