Camden Property Trust CPT is slated to report fourth-quarter and full-year 2024 results on Feb. 6, after market close.  The company’s quarterly results are likely to display a year-over-year decline in revenues and funds from operations (FFO) per share.

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In the last reported quarter, this residential real estate investment trust (REIT) reported an FFO per share of $1.71, beating the Zacks Consensus Estimate of $1.68. Results reflected higher same-property revenues and average rental rates. However, a rise in same-property expenses undermined the results.

In the preceding four quarters, CPT’s FFO per share outpaced the Zacks Consensus Estimate on all occasions, with the average beat being 1.34%. The graph below depicts this surprise history:

Camden Property Trust Price and EPS Surprise

Camden Property Trust price-eps-surprise | Camden Property Trust Quote

In this article, we will dive deep into the U.S. apartment market environment and the company's fundamentals and analyze the factors that may have contributed to its fourth-quarter 2024 performance.

US Apartment Market in Q4

Per RealPage data, U.S. apartment demand surged to its highest level in almost three years in the fourth quarter of 2024, comfortably surpassing the record-high new supply seen that year.

Between October and December 2024, the U.S. apartment market absorbed 230,819 market-rate units, while 155,408 new units were delivered during the same period. Annual supply hit 588,883 units, while demand led to 666,699 units.

As demand exceeded supply, U.S. apartment occupancy saw a notable annual increase, reaching 94.8% in December. The annual occupancy change was 0.7%. However, rent growth remained stagnant due to the pressure of historically high new supply levels. Rents rose 0.5% in 2024, and the monthly effective rent change was down 0.3%. The average effective rent was $1,823.

Factors at Play for Camden Property

Amid this surge in demand, Camden’s quarterly performance is likely to have benefited from its presence in high-growth markets with a superior product mix of A/B quality properties in urban and suburban markets. The markets are characterized by growing employment in high-wage sectors of the economy with in-migration trends.

However, the high supply of rental properties in some markets may have hurt the rent growth momentum, undermining the revenue and FFO performance to some extent for the fourth quarter.

Projections for CPT

For the fourth quarter, the Zacks Consensus Estimate for CPT’s revenues currently stands at $387 million, implying a decline of 0.2% from the year-ago reported number.

For the fourth quarter, Camden Property expects core FFO per share in the band of $1.68-$1.72. However, before the fourth-quarter earnings release, the company’s activities were not adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly core FFO per share has remained unchanged in the past month at $1.68, suggesting a decline of 2.9% year over year.

For full-year 2024, Camden Property expected its core FFO per share in the band of $6.79-$6.83. For the full year, the Zacks Consensus Estimate for the same has fallen a cent in the past two months to $6.75. The figure indicates a 1.03% decrease year over year on revenues of $1.54 billion.

Camden expected growth for 2024 same-property revenues between 1.10% and 1.50%, same-store expenses between 2.10% and 2.50%, and same-store NOI between 0.35% and 1.15%.

What Our Quantitative Model Predicts for CPT

Our proven model does not conclusively predict a surprise in terms of FFO per share for CPT this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

Camden Property currently has an Earnings ESP of 0.00% and carries a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the broader REIT sector — Ventas VTR and $Vornado Realty Trust(VNO-N)$ VNO — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

Ventas, scheduled to report quarterly numbers on Feb. 12, has an Earnings ESP of +0.89% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vornado Realty Trust is slated to report quarterly numbers on Feb. 10. VNO has an Earnings ESP of 2.25% and carries a Zacks Rank of 3 at present.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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