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Eastgroup Properties (EGP)
NYSE:EGP
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Eastgroup Properties
(NYSE:EGP)73Outperform
Positive Factors
Development Projects
EastGroup has started $125 million new development starts and expects $300 million more in 2025, showcasing strong market and development capabilities.
Leasing Activity
EastGroup achieved its highest quarterly leasing activity ever by completing 2.8 million square feet of new and renewal leasing.
Negative Factors
Financial Performance
There are updates in financial estimates for EastGroup Properties that show a slight decrease in AFFO expectations.
Eastgroup Properties (EGP) vs. S&P 500 (SPY)
Market Cap
$9.58B
Dividend Yield2.9%
Average Volume (3M)439.69K
Price to Earnings (P/E)39.5
Beta (1Y)0.94
Revenue Growth12.35%
EPS Growth5.59%
CountryUS
Employees101
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)4.66
Shares Outstanding52,024,017
10 Day Avg. Volume422,590
30 Day Avg. Volume439,691
Financial Highlights & Ratios
PEG Ratio7.07
Price to Book (P/B)N/A
Price to Sales (P/S)14.96
Price to Cash Flow (P/CF)44.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$196.31Price Target Upside4.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
Eastgroup Properties Business Overview & Revenue Model
Company DescriptionEastGroup Properties, Inc. (EGP) is a real estate investment trust (REIT) focused on the development, acquisition, and operation of industrial properties in major Sunbelt markets throughout the United States. The company's core business is centered on owning, managing, and leasing multi-tenant business distribution spaces, which are strategically located near major transportation hubs and in proximity to large population centers.
How the Company Makes MoneyEastGroup Properties generates revenue primarily through rental income from its portfolio of industrial properties. The company leases space to a diversified tenant base across various industries, including e-commerce, logistics, and manufacturing. Key revenue streams include long-term lease agreements and renewals, which provide a stable and predictable cash flow. Additionally, EastGroup Properties invests in developing new properties and acquiring existing ones to expand its portfolio and increase rental income potential. The company's earnings are further supported by its strategic focus on high-demand regions, enabling it to capitalize on favorable market conditions and maintain high occupancy rates.
Eastgroup Properties Financial Statement Overview
Summary
Eastgroup Properties presents a strong financial profile with consistent revenue growth and robust cash flow generation, supporting its operations and expansion in the REIT sector. While the company's leverage is high, typical for its industry, it maintains a solid equity base. The notable decline in net income in 2024 presents a potential risk that warrants monitoring. Overall, the company is well-positioned to capitalize on its operational strengths and navigate industry challenges.Income Statement
Eastgroup Properties demonstrated a solid revenue growth trajectory over the past years, with revenue increasing from $331 million in 2019 to $570 million in 2023. The gross profit margin is strong, indicating efficient cost management. However, the net profit margin saw fluctuations, notably declining in 2024 due to significantly lower net income, which could be attributed to exceptional items or increased costs. Overall, the company maintains a healthy EBIT and EBITDA margin, supporting operational efficiency.75
Positive
Balance Sheet
The company has maintained a stable balance sheet with a relatively high debt-to-equity ratio, reflecting significant leverage which is common in the REIT industry. However, the equity ratio suggests a solid equity base. The return on equity has been robust, although the sharp decline in net income in 2024 could impact investor returns if sustained. Overall, the balance sheet reveals a healthy but leveraged financial position.70
Positive
Cash Flow
Eastgroup Properties shows strong free cash flow generation, with consistent growth over the years. The operating cash flow to net income ratio is favorable, suggesting effective cash conversion from operations. Despite high capital expenditures, the company has maintained solid free cash flow levels, providing flexibility for debt servicing and investment opportunities.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 640.23M | 570.59M | 487.02M | 409.48M | 363.02M | Gross Profit |
| 2.20M | 416.56M | 353.11M | 294.40M | 259.65M | EBIT |
| 638.03M | 228.14M | 183.77M | 151.72M | 129.17M | EBITDA |
| 453.25M | 399.22M | 337.41M | 278.82M | 245.53M | Net Income Common Stockholders |
| 4.66K | 200.49M | 186.18M | 123.78M | 73.49M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 17.53M | 40.26M | 56.00K | 4.39M | 21.00K | Total Assets |
| 5.08B | 4.52B | 4.04B | 3.22B | 2.72B | Total Debt |
| 1.55B | 1.70B | 1.88B | 1.48B | 1.32B | Net Debt |
| 1.53B | 1.66B | 1.88B | 1.47B | 1.32B | Total Liabilities |
| 1.78B | 1.91B | 2.08B | 1.64B | 1.45B | Stockholders Equity |
| 3.29B | 2.61B | 1.95B | 1.57B | 1.27B |
| Cash Flow | Free Cash Flow | |||
| 338.20M | 338.20M | 275.65M | 223.19M | 163.15M | Operating Cash Flow |
| 338.20M | 338.20M | 316.50M | 256.49M | 196.28M | Investing Cash Flow |
| -570.06M | -570.06M | -521.15M | -529.26M | -288.26M | Financing Cash Flow |
| 272.06M | 272.06M | 200.31M | 277.14M | 91.77M |
Eastgroup Properties Technical Analysis
Positive
187.46
Price Trends
169.99
Positive
171.14
Positive
173.21
Positive
Market Momentum
3.93
Negative
73.26
Negative
85.00
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGP, the sentiment is Positive. The current price of 187.46 is above the 20-day moving average (MA) of 179.70, above the 50-day MA of 169.99, and above the 200-day MA of 173.21, indicating a bullish trend. The MACD of 3.93 indicates Negative momentum. The RSI at 73.26 is Negative, neither overbought nor oversold. The STOCH value of 85.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EGP.
Eastgroup Properties Risk Analysis
Eastgroup Properties disclosed 31 risk factors in its most recent earnings report. Eastgroup Properties reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Eastgroup Properties Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $115.72B | 30.40 | 6.97% | 3.15% | 2.22% | 23.71% | |
80 Outperform | $7.70B | 26.10 | 10.99% | 2.61% | 9.06% | 4.57% | |
77 Outperform | $6.86B | 34.75 | 5.53% | 4.11% | 8.41% | -2.96% | |
76 Outperform | $9.21B | 33.58 | 3.38% | 4.13% | 17.48% | 7.45% | |
73 Outperform | $9.58B | 39.54 | 7.72% | 2.90% | 12.35% | 5.59% | |
73 Outperform | $6.73B | 35.20 | 5.59% | 2.79% | 18.24% | 6.95% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% |
* Real Estate Sector Average
Performance Comparison
EGP
Eastgroup Properties
187.46
12.56
7.18%
PLD
Prologis
124.04
-4.51
-3.51%
STAG
Stag Industrial
36.56
1.03
2.90%
TRNO
Terreno Realty
68.50
6.53
10.54%
FR
First Industrial Realty
57.99
6.63
12.91%
REXR
Rexford Industrial Realty
41.40
-9.06
-17.95%
Eastgroup Properties Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 8.12% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with strong financial performance, leasing activity, and strategic acquisitions. However, challenges such as occupancy decline, tenant defaults, and issues in the California market were noted. The company remains optimistic about 2025 with strategic plans to address these issues.Highlights
Funds from Operations Growth
Funds from operations rose 5.9% for the quarter and 7.9% for the year, excluding involuntary conversions.
Strong Leasing Activity
Year leasing was 97.1% with occupancy at 96.1%, and quarterly re-leasing spreads were 47% GAAP and 29% cash.
Record Amount of Square Footage Leased
The company achieved a record amount of square footage leased within the operating portfolio in the past quarter.
Diversified Rent Roll
The top 10 tenants comprise only 7.2% of rents, down 70 basis points from year-end 2023.
Acquisition Growth
Acquired 4 fully leased buildings in Dallas and Phoenix, increasing market presence.
Strong Financial Metrics
Debt to total market capitalization was 15%, debt-to-EBITDA ratio was 3.4x, and interest and fixed charge coverage ratio was 11.5x.
Lowlights
Occupancy Decline
Average quarterly occupancy was 95.8%, down over 200 basis points from the fourth quarter of 2023.
Challenges with Large Tenant Defaults
Tenant defaults were contained to a handful of larger customers, impacting bad debt.
California Market Challenges
Los Angeles market faced credit challenges and slower leasing activity.
Increased Leasing Costs
Leasing costs increased due to inflationary pressures and higher leasing commission percentages.
Company Guidance
During the EastGroup Properties Fourth Quarter 2024 Earnings Call, significant metrics were highlighted to reflect the company's performance and strategic outlook. The company's funds from operations (FFO) rose by 5.9% for the quarter and 7.9% for the year, excluding involuntary conversions, marking a continued trend of growth. Occupancy was strong, with year leasing at 97.1% and average quarterly occupancy at 95.8%, despite being down 200 basis points from the previous year. Re-leasing spreads were substantial, with quarterly GAAP at 47% and cash at 29%. Year-end results showed re-leasing spreads of 50% GAAP and 30% cash, while cash same-store net operating income (NOI) increased by 3.4% for the quarter and 5.6% for the year. The company also reported improvements in its rent roll diversity, with top 10 tenants comprising 7.2% of rents, down 70 basis points from the previous year. Looking ahead, EastGroup forecasts 2025 development starts of $300 million, with $150 million earmarked for strategic acquisitions, aiming to maintain an average occupancy of 96% and a cash same-property NOI midpoint of 5.9%.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.