DDR Corp. (DDR) has unveiled its outlook for 2015. The company projects its operating funds from operations (FFO) per share within $1.20–$1.25 for 2015. This is ahead of the company’s 2014 operating FFO per share outlook of $1.15–$1.17. The Zacks Consensus Estimate for 2015 currently stands at $1.23 per share.
As a result, shares of DDR climbed over 2.5%. Broader market was optimistic as well driven by expectations for a continued low rate environment for some more time following the Fed minutes disclosure.
DDR’s 2015 outlook is based on its 2014 results and current market conditions. The company assumes its same store net operating income (NOI) to grow 2.5–3.0% in 2015, while leased rate is expected to register an increase of 25–50 basis points. The projection range for fee income is $34–$36 million, while that for interest income is $27–$29 million.
On the other hand, interest expenses are anticipated at $246–$258 million on a GAAP basis, where as general and administrative (G&A) expense is expected to account for around 5% of total gross revenue.
Apart from these, DDR expects to close acquisitions and dispositions worth $250 million each. The company also assumes $200 million of re/development activities in 2015 which are expected to take place mainly in the second half of the year.
Notably, DDR is slated to release its fourth-quarter and full year 2014 results after the market closes on Feb 11, 2015. The Zacks Consensus Estimate currently stands at 31 cents per share for the quarter and $1.16 for the year.
In recent times, DDR has hit headlines for a number of reasons. The company announced that it completed the year 2014 as a net seller of assets amid solid pricing for its properties and closed $4.3 billion of transactions in the year. It also declared an 11% hike in its quarterly dividend rate.
Going forward, we believe that the company’s efforts in portfolio-repositioning and capital-recycling would help it ride on the growth trajectory.
DDR currently carries a Zacks Rank #3 (Hold). Better-ranked stocks include Kimco Realty Corporation (KIM), The Macerich Company (MAC) and Regency Centers Corporation (REG). All these stocks carry a Zacks Rank #2 (Buy).
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment