It has been about a month since the last earnings report for UDR (UDR). Shares have added about 2.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is UDR due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
UDR Q4 FFOA Meets Estimates, Revenues Up Y/Y, Dividend Hiked
UDR reported fourth-quarter 2024 FFO as adjusted (FFOA) per share of 63 cents, in line with the Zacks Consensus Estimate. The figure remained unchanged year over year.
Quarterly revenues from rental income were $420.4 million, which missed the Zacks Consensus Estimate marginally. Total revenues came in at $422.7 million. On a year-over-year basis, rental income and total revenues rose 2.3% each.
Results reflect year-over-year growth in same-store revenues. However, a rise in property operating and maintenance and interest expenses acted as dampeners. The company increased its annualized dividend payment and issued 2025 guidance.
Per Tom Toomey, UDR’s chairman and CEO, “As we look ahead, we see easing supply pressures, a resilient labor market, and relative affordability of apartments that remains attractive versus other forms of housing, collectively creating a fundamental backdrop for improved Same-Store NOI growth.”
In 2024, FFOA was $2.48 per share, in line with the Zacks Consensus Estimate. The figure surpassed the prior-year figure by a cent. Full-year revenues from rental income of $1.66 billion improved by 2.6% year over year. The figure missed the consensus estimate marginally.
UDR’s Fourth Quarter in Detail
In the reported quarter, same-store revenues increased 2.5% year over year. Same-store expenses were up 3.4%, and same-store NOI improved 2.1%.
UDR registered a same-store effective blended lease rate decline of 0.5% during the quarter. The residential REIT’s weighted average same-store physical occupancy of 96.8% increased 50 basis points sequentially and remained unchanged year over year.
However, property operating and maintenance expenses of $72.2 million rose 5.4% year over year. Interest expenses climbed 4.8% to $49.6 million.
UDR’s Balance Sheet Position
As of Dec. 31, 2024, UDR had $1.1 billion of liquidity through a combination of cash and undrawn capacity on its credit facilities.
Total debt was $5.8 billion as of the same date, with only $535 million, or 9.7% of total consolidated debt, maturing through 2026. In addition, net debt-to-EBITDAre of 5.5X in the fourth quarter improved from 5.6X at the end of the prior quarter.
UDR ended the quarter with a weighted average interest rate of 3.38% and a weighted average years to maturity of 5.2 years.
2025 Guidance by UDR
The company provided first-quarter and full-year 2025 guidance.
It expects first-quarter 2025 FFOA per share in the range of 60-62 cents. For 2025, FFOA per share is expected in the range of $2.45-$2.55.
For the full year, on a straight-line basis, the company projects growth rates for same-store revenues in the range of 1.25-3.25%, same-store expenses between 2.75% and 4.25% and same-store NOI between 0.50% and 3.00%.
In the past month, investors have witnessed an upward trend in estimates revision.
Currently, UDR has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. 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.
Estimates have been trending upward for the stock, and the magnitude of this revision has been net zero. Notably, UDR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
UDR belongs to the Zacks REIT and Equity Trust - Residential industry. Another stock from the same industry, Essex Property Trust (ESS), has gained 1.1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2024.
Essex Property Trust reported revenues of $454.47 million in the last reported quarter, representing a year-over-year change of +7.8%. EPS of $4 for the same period compares with $3.83 a year ago.
For the current quarter, Essex Property Trust is expected to post earnings of $3.92 per share, indicating a change of +2.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
Essex Property Trust has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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This article originally published on Zacks Investment Research (zacks.com).
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