Six REITs That Crushed Analyst Estimates This Week

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Although geopolitics and interest rates can affect stock prices over short periods, in the long run, a company's earnings and revenue growth will separate the better stocks from the also-rans.

Many investors focus each quarter on whether the company beats the analyst estimates, but it's also important to note whether the company topped the numbers from the same quarter a year ago. If company earnings are sliding, it tends to dampen Wall Street’s enthusiasm, even if earnings are ahead of the estimates.

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July 22-July 26 was busy with many real estate investment trusts (REITs) releasing second-quarter operating results. However, a half dozen REITs reported earnings that stood out from other REITs by beating the estimates and topping the numbers from the second quarter of 2023. Take a look at the best of this week:

Note: M=million

Some results really stand out from this chart. Healthpeak Properties Inc. (NYSE:DOC) trounced its Q2 2023 FFO and revenue, partially due to Healthpeak's merger with Physicians Realty Trust in March of this year.

Veris Inc (NYSE:VRE) crushed the FFO estimate by 28.5%, CTO Realty Growth Inc (NYSE:CTO) beat the consensus estimate by 23% and Pebblebrook Hotel Trust (NYSE:PEB) walloped the FFO estimate by 13.11%.

Analysts have raised price targets on some of these REITs this week. On July 25, RBC Capital analyst Brad Heffern maintained Agree Realty Corporation (NYSE:ADC) at Outperform and raised the price target by 11.1% from $63 to $70. Stifel analyst Simon Yarmak maintained Agree Realty with a Buy rating the previous day and raised the price target from $67.50 to $71.50.

Agree Realty also increased its full 2024 AFFO per share guidance from $4.10-$4.13 to $4.11-$4.14. The street estimate is $4.08. The Bloomfield Hills, MI-based triple-net-lease REIT focuses on retail properties and has seen its shares rise over 25% since mid-April. Investors love Agree Realty's monthly dividend of $0.25 per share. The next ex-dividend date is July 31.

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Getty Realty Corp

Getty Realty Corp. (NYSE:GTY) is a retail REIT based in Jericho, NY, that specializes in owning, leasing, and financing 1,124 free-standing auto-related properties in 42 states and Washington, D.C.

Sixty-three percent of Getty Realty's properties are gas stations and convenience stores. Another 20% are car washes; the remainder are automotive repair shops, auto service and auto parts stores. At the end of the second quarter 2024, its property occupancy rate was 99.7%.

In addition to beating the estimates on Q2 operating results, Getty Realty also raised its full-year 2024 AFFO forecast from $2.29-$2.31 to $2.30-$2.32 per share. The street estimate is $2.31.

On July 25, JMP Securities analyst Mitch Germain maintained Getty Realty with a Market Outperform rating and raised the price target from $31.50 to $33.

Pebblebrook Hotel Trust

Pebblebrook Hotel Trust is a Bethesda, MD-based REIT that invests in 46 upscale hotel and resort properties in or near 13 urban markets in major U.S. gateway cities. Most of its properties are located in California and Florida.

Pebblebrook also said it sees full-year 2024 FFO between $1.59-$1.70 per share. The street estimate is $1.60.

Both Pebblebrook Hotel and Agree Realty smashed estimates last quarter as well.

Healthpeak Properties

Healthpeak Properties is an El Segundo, CA-based diversified health care REIT that owns and operates private-pay facilities such as life science centers, medical offices and continuing care retirement communities. Although it has properties nationwide, most are in the San Francisco, San Diego and Boston areas. Healthpeak's IPO was created in 1985 and added to the S&P 500 in 2008. It presently owns 774 properties worth over $21 billion.

On March 1, Healthpeak officially merged with Physicians Realty Trust in an all-stock-for-stock transaction.

CTO Realty Growth

CTO Realty Growth is a diversified REIT based in Winter Park, FL, that owns and operates 20 retail, office, and mixed-use properties totaling 3.9 million square feet. Seventy-one percent of its portfolio annual base rent (ABR) comes from Georgia, Texas, and Florida. Its present occupancy rate is 93%.

CTO Realty Growth also externally manages and owns a $39 million interest in Alpine Income Property Trust, Inc. (NYSE:PINE), a net lease REIT.

One potentially profitable idea during earnings season is to buy a basket of stocks that have performed well in the latest quarterly reports. There are two ways to do this: An investor can allocate the same percentage of shares across all the REITs above or allocate the same amount of money toward each.

Looking at the second-quarter performance, investors may want to forego trying to decide which of these to buy and instead consider buying a basket of all six REITs.

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