It has been about a month since the last earnings report for PS Business Parks (PSB). Shares have added about 5.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is PS Business Parks due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
PS Business Parks Q4 FFO Beats on Rental Rate Growth
PS Business Parks reported fourth-quarter 2018 core FFO of $1.65 per share, beating the Zacks Consensus Estimate of $1.63. The figure also comes in 8.6% higher than $1.52 recorded in the prior-year quarter.
Results highlight improvement in Same-Park NOI backed by growth in rental rates and occupancy, as well as improved NOI from non-Same-Park and multi-family assets. However, NOI reduction due to asset sold in 2018 partly offset the positives.
Rental income came in at around $104.1 million, marking 2.2% growth from the year-ago tally. The reported figure also exceeded the Zacks Consensus Estimate of $103.6 million.
Quarter in Detail
Same-Park rental income was up 1% year over year to $98.1 million, while Same-Park NOI climbed 4% year over year to $70.3 million, driven by improving rental rates and occupancy level.
Same-Park annualized revenue per occupied-square-foot inched up 0.8% to $15.32, while weighted average square-foot occupancy was 95.2%, up 10 basis points year over year.
Liquidity
PS Business Parks exited 2018 with cash and cash equivalents of $37.4 million, down from $114.9 million reported at the end of the previous year.
Dividend Update
On Feb 20, the company announced a quarterly dividend of $1.05 per share. The dividend is payable on Mar 28, to shareholders of record as of Mar 13, 2019.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, PS Business Parks has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise PS Business Parks has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
PS Business Parks, Inc. (PSB): Free Stock Analysis Report
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