What's in Store for Alexandria (ARE) This Earnings Season?

·4-min read

Alexandria Real Estate Equities Inc. ARE is scheduled to release first-quarter 2022 results on Apr 25 after the closing bell. Alexandria’s quarterly results are likely to reflect growth in funds from operations (FFO) per share.

In the last reported quarter, this Pasadena, CA-based urban office real estate investment trust (REIT), primarily focused on collaborative life science and technology campuses, delivered a surprise of 0.51% in terms of FFO per share. ARE witnessed continued healthy leasing activity and rental rate growth during the quarter.

Over the preceding four quarters, Alexandria’s FFO per share surpassed the Zacks Consensus Estimate on each occasion, the average beat being 1.60%.

Alexandria Real Estate Equities, Inc. Price and EPS Surprise

Alexandria Real Estate Equities, Inc. Price and EPS Surprise
Alexandria Real Estate Equities, Inc. Price and EPS Surprise

Alexandria Real Estate Equities, Inc. price-eps-surprise | Alexandria Real Estate Equities, Inc. Quote

Let’s see how things have shaped up before this announcement.

Factors at Play

Alexandria’s properties and tenants became indispensable amid the heightening need for effective diagnostics, therapies and vaccines to fight the ongoing global health crisis. ARE has Class A properties in AAA locations. Its high-quality lab-office assets are positioned in key locations.

With high demand, its ownership of such premium properties at strategic cluster locations is likely to have experienced healthy leasing activity, decent rental rate growth and occupancy during the first quarter.

During the quarter, Alexandria announced a long-term lease with Bristol Myers Squibb for the development of the global biopharmaceutical company's newest core R&D facility, a 427,000 rentable square feet (RSF) world-class building at the Alexandria Point mega campus in the San Diego cluster market.

Also, the company signed a 334,000 RSF long-term lease with Eli Lilly for the development of Lilly's new state-of-the-art Institute for Genetic Medicine at 15 Necco Street in the Seaport life science submarket of Greater Boston.

With substantial part of Alexandria’s revenues coming from investment-grade or publicly-traded large-cap tenants, rent collections in the to-be-reported quarter are likely to have been impressive.

Alexandria is likely to have experienced adequate financial flexibility to cushion and enhance its market position. The company is focused on the acquisition, development and redevelopment of premium properties in key locations and this is expected to have continued in the first quarter as well.

Such efforts are anticipated to have aided revenues and the net operating income growth of ARE during the first quarter.

The Zacks Consensus Estimate for quarterly FFO per share currently stands at $2.00, suggesting a 4.71% increase from the prior-year period’s reported figure.

However, ahead of the first-quarter earnings release, there is a lack of solid catalysts to make investors grow bullish on the stock. Hence, the Zacks Consensus Estimate for quarterly FFO per share has remained unchanged over the past week.

Here Is What Our Quantitative Model Predicts:

Alexandria has the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

Earnings ESP: Alexandria has an Earnings ESP of +0.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ARE currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Stocks That Warrant a Look

Here are some other stocks like Public Storage PSA, Host Hotels & Resorts, Inc. HST and Cousins Properties Incorporated CUZ that are worth considering from the REIT sector as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:

Public Storage, slated to release first-quarter earnings on May 3, has an Earnings ESP of +0.17% and a Zacks Rank of 2 at present.

Host Hotels & Resorts, scheduled to report quarterly figures on May 4, has an Earnings ESP of +2.00% and a Zacks Rank of 1 currently.

Cousins Properties Incorporated, slated to report quarterly numbers on Apr 28, has an Earnings ESP of +0.50% and carries a Zacks Rank of 3.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Host Hotels & Resorts, Inc. (HST) : Free Stock Analysis Report

Public Storage (PSA) : Free Stock Analysis Report

Cousins Properties Incorporated (CUZ) : Free Stock Analysis Report

Alexandria Real Estate Equities, Inc. (ARE) : Free Stock Analysis Report

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