EastGroup Properties, Inc. (EGP, Financial) has reported its first-quarter revenue at $174.45 million, surpassing the market consensus of $169.85 million. The company has achieved significant milestones, marking two of its three historic highs in the volume of square feet leased in its operating portfolio over the last two quarters.
Despite ongoing concerns about the impact of global trade on leasing and capital market activities, EastGroup Properties remains proactive in addressing these challenges. The company's leadership emphasizes maintaining a robust balance sheet and prioritizing diversification in tenant profiles and geographic locations. This strategic focus aims to buffer the company against potential economic fluctuations.
CEO Marshall Loeb expressed confidence in navigating through current uncertainties, drawing on past experiences of economic volatility. He remains optimistic about the long-term prospects, driven by positive secular trends benefiting their high-demand, shallow bay and last mile markets.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for EastGroup Properties Inc (EGP, Financial) is $190.44 with a high estimate of $218.00 and a low estimate of $165.00. The average target implies an upside of 18.68% from the current price of $160.47. More detailed estimate data can be found on the EastGroup Properties Inc (EGP) Forecast page.
Based on the consensus recommendation from 21 brokerage firms, EastGroup Properties Inc's (EGP, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for EastGroup Properties Inc (EGP, Financial) in one year is $208.89, suggesting a upside of 30.17% from the current price of $160.47. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the EastGroup Properties Inc (EGP) Summary page.
Key Business Developments
Release Date: February 07, 2025
- Funds from Operations (FFO): Increased 5.9% for Q4 and 7.9% for the year.
- FFO per Share: $2.15 for Q4, up from $2.03 in the same quarter last year.
- Year-end Leasing: 97.1% with occupancy at 96.1%.
- Average Quarterly Occupancy: 95.8%, down over 200 basis points from Q4 2023.
- Releasing Spreads: 47% GAAP and 29% cash for the quarter; 53% GAAP and 36% cash for the year.
- Same Store NOI: Increased 3.4% for the quarter and 5.6% for the year.
- Debt to Total Market Capitalization: 15%.
- Debt to EBITDA Ratio: 3.4 times.
- Interest and Fixed Charge Coverage Ratio: 11.5 times.
- FFO Guidance for 2025: $2.05 to $2.13 per share for Q1; $8.80 to $9 for the year.
- Projected Development Starts for 2025: $300 million.
- Strategic Acquisitions for 2025: $150 million.
- Capital Proceeds for 2025: $450 million from equity issuance and revolver use.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Funds from operations (FFO) rose by 5.9% for the quarter and 7.9% for the year, indicating strong financial performance.
- Year-end leasing was at 97.1% with occupancy at 96.1%, showcasing high demand and efficient property management.
- EastGroup Properties Inc (EGP, Financial) achieved a record amount of square footage leased within the operating portfolio in the past quarter.
- The company successfully acquired four fully leased buildings in Dallas and Phoenix, expanding its presence in key markets.
- EastGroup Properties Inc (EGP) maintains a strong balance sheet with a debt to total market capitalization of 15% and a debt to EBITDA ratio of 3.4 times.
Negative Points
- Average quarterly occupancy decreased by over 200 basis points from the fourth quarter of 2023.
- The development leasing was slower, with decision-making taking longer than anticipated.
- Tenant defaults were contained to a few larger customers, impacting revenue.
- The company issued equity at a price slightly below NAV, which may not be ideal for shareholders.
- The industrial market in Los Angeles is experiencing challenges, with negative absorption affecting occupancy rates.
