Centerspace Beats Q2 Earnings Expectations, Raises FY2021 Guidance

Centerspace (CSR) reported stronger-than-expected Q2 results, topping earnings estimates. The company reported adjusted earnings of $1.48 per share, beating analysts’ expectations of $0.03 per share. The company reported a loss of $0.44 per share in the prior-year period.

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FFO came in at $0.95 for the quarter compared to $0.93 reported in the year-ago quarter. Core FFO of $0.98 per share increased 7.7% compared to $0.91 reported a year ago.

Revenues jumped 6.3% year-over-year to $46.65 million. The increase in revenues reflected a surge in non-same-store revenues which grew 376.5% to $4.4 million, as well as same-store revenues, which grew 3.2% to $40.5 million. (See CSR stock charts on TipRanks)

During the quarter, Centerspace inked a deal with KMS to acquire a real estate portfolio comprising 17 communities.

Raised Guidance, FY2021 EPS up 123%

Based on the expected accretion from the acquisition deal with KMS, which is expected to close in the third quarter, Centerspace revised its 2021 guidance. The company raised its EPS outlook by 123% and Core FFO by 7%.

It now forecasts earnings in the range of $0.58 to $0.76 per share. The company previously expected earnings in the range of $0.10 to $0.50 per share.

Core FFO is forecast to be in the range of $3.78 – $3.94 per share versus the prior guidance range of $3.48 – $3.72 per share.

Following the Q2 results, BMO Capital analyst John Kim reiterated a Buy rating on the stock with a price target of $91. This implies that shares are fully priced at current levels.

Kim forecasts the company to report a loss of $0.49 per share for the third quarter of 2021.

Overall, the stock has a Moderate Buy consensus rating based on 4 Buys and 2 Holds. The average Centerspace price target of $87.50 implies 4.3% downside potential from current levels.