REIT Stocks' Q2 Earnings To Watch: BDN, EGP, LHO, SLG, CCI

The Q2 earnings season for the real estate investment trusts (“REITs”) has kick-started today with the release of the San Francisco, CA-based industrial REIT Prologis, Inc.’s (NYSE:PLD) results. Prologis posted positive surprise during the quarter.

The important REIT releases to look forward to in the next two days are Brandywine Realty Trust (NYSE:BDN) , EastGroup Properties Inc. (NYSE:EGP) , LaSalle Hotel Properties (NYSE:LHO) , SL Green Realty Corp. (NYSE:SLG) and Crown Castle International Corp. (NYSE:CCI) . Among these, Crown Castle International is expected to release results on Jul 21, while the rest are likely to report tomorrow.

The second-quarter 2016 witnessed doldrums in the equity markets, uncertainty over the Fed rate hike and fluctuations in oil prices. Further, during the end of the quarter, referendum by the Britons to stay out of the European Union, added to the equity markets’ unrest.

This uncertainty forced the panic-stricken investors to flee to the safety of government bonds. An increased investment in treasury bonds raised their prices. Consequently, the yields on the benchmark 10-year Treasury note declined to an almost record low. The REITs with decent dividend-yielding capacity and earnings growth potential received investors’ attention.

Further, following the dismal jobs report in early June, chances of a rate hike were also diminished substantially. This somewhat allayed the concerns of the capital-intensive sectors like REIT, which borrows money from the market.

Let’s have a look at what’s in store for five REITs mentioned above:

Brandywine Realty is scheduled to report second-quarter 2016 results on Wednesday, Jul 20, after the market closes. The company has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). Our model does not conclusively predict that the company will record a positive surprise. This is because the company lacks the right combination of the two key ingredients – a positive Earnings ESP (the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold).

Jackson, MS-based EastGroup Properties is slated to report second-quarter 2016 results on Wednesday, Jul 20, after the market closes. The company has an Earnings ESP of 0.00%. The company’s Zacks Rank #4 (Sell) further lowers the predictive power of ESP. In fact, we caution against Sell-rated (Zacks Rank #4 or 5) stocks going into the earnings announcement, especially when they are seeing negative estimate revisions.

LaSalle Hotel Properties has an Earnings ESP of 0.00% and a Zacks Rank #3. Our proven model does not conclusively show that LaSalle Hotel Properties is likely to post a positive surprise this quarter.

SL Green is slated to report second-quarter 2016 earnings after the close of market on Jul 20. The company has an Earnings ESP of +5.98%. Its Zacks Rank #3 raises the chances of a positive surprise.

SL Green is pursuing an opportunistic investment policy to enhance its overall portfolio. This includes investment in long-term core properties, opportunistic assets and debt & preferred equities. In sync with this strategy, the company completed several transactions in the second quarter. (Read more: SL Green Likely to Beat Q2 Earnings: Stock to Gain?)

Crown Castle International is slated to report second-quarter 2016 earnings after the close of market on Jul 21. The company has an Earnings ESP of 0.00% and a Zacks Rank #3. Our proven model does not conclusively show that LaSalle Hotel Properties is likely to post positive this quarter.

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