Retail REITs Q3 Earnings To Watch On Oct 27: MAC, KIM & More

Now we are at the peak of third-quarter earnings releases with companies in various spaces including real estate investment trust (“REIT”) having reported their results. To date, all categories of REITs have come up with their earnings numbers.

This week will see a deluge of third-quarter earnings releases with many companies in the REIT space reporting their earnings numbers.

Some retail REITs which are slated to release their results on Oct 27 are The Macerich Company (NYSE:MAC) , Kimco Realty Corporation (NYSE:KIM) , Weingarten Realty Investors (NYSE:WRI) and Kite Realty Group Trust (NYSE:KRG) .

Per the study by the CBRE Group Inc. (NYSE:CBG) , during the third quarter average availability of retail space was 10.4%, down 20 basis points (bps) on a sequential basis and down 50 bps year over year. According to the study, over two thirds of the total 62 markets, that were studied, witnessed sequential fall in the availability of retail space in the quarter. However, demand for retail space in the country continues to grow as new construction remains relatively muted and retailers are combining their online and bricks-and-mortar operations.

Now let’s take a look at what’s in store for these retail REITs which are slated to report tomorrow.

For doing this, we rely on the Zacks methodology, combining a favorable Zacks Rank – Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) – and a positive Earnings ESP, to predict the chances of a beat this quarter. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Per our proprietary methodology, Earnings ESP shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. Research shows that with this combination of rank and ESP, chances of a positive earnings surprise are as high as 70% for the stocks.

Santa Monica, CA-based Macerich is owns, acquires, leases, manages, develops and redevelops regional and community shopping centers in high barrier-to-entry U.S. markets. The company enjoys a portfolio of premium malls in the vibrant U.S. markets. Further, the presence of well-capitalized retailers in its roaster enabled the company to maintain a stable source of rent over the past quarters. However, apart from competing with other retail properties, Macerich faces competition from alternative retail channels such as catalogs and e-Commerce websites. Currently, the company has a Zacks Rank #3 and Earnings ESP of 0.00%. (Read more: Macerich to Report Q3 Earnings: What to Expect?)

New Hyde Park, NY-based Kimco along with its subsidiaries is one of the major owners and operators of neighborhood and community shopping centers in the U.S. The company remains on track with its strategic 2020 Vision that envisages the ownership of premium assets in major metro markets in the U.S. as well as a reduction in the joint-venture exposure. However, earnings dilution led by high disposition activity, along with competition from other players, are causes of concern. Currently, the company has a Zacks Rank #3 and Earnings ESP of 0.00%. (Read more: Kimco Realty Q3 Earnings Preview: What's in Store?)

Weingarten Realty, based in Houston, TX is engaged in developing, acquiring, and managing properties in twenty one states spanning the southern portion of the U.S. from coast to coast. Our model does not conclusively predict that the company will record a positive surprise. This is because the company has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Indianapolis, IN-based Kite Realty Group primarily focuses on the development, construction, acquisition, ownership and operation of high quality neighborhood and community shopping centers in selected growth markets in the U.S. Currently, the company has a Zacks Rank #4 (Sell) and Earnings ESP of 0.00%. The REIT’s quarterly estimates have remained stable at 52 cents over the past seven days. Note that we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

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