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Federal Realty Investment Trust (FRT)
:FRT
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Federal Realty
(NYSE:FRT)72Outperform
Positive Factors
Financial Performance
FRT posted its highest-ever quarterly FFO, generating occupancy gains and better-than-feared bad debt.
Leasing and Occupancy
Robust leasing environment continues with FRT signing 126 comparable leases at a 14% cash spread, a higher proportion than peers.
Negative Factors
Development Projects
The temporary drag from development will be more pronounced in 2025 before the FFO benefit can be realized.
Federal Realty (FRT) vs. S&P 500 (SPY)
Market Cap
$8.89B
Dividend Yield4.15%
Average Volume (3M)762.40K
Price to Earnings (P/E)30.1
Beta (1Y)0.82
Revenue Growth6.21%
EPS Growth22.32%
CountryUS
Employees304
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)3.42
Shares Outstanding85,680,610
10 Day Avg. Volume659,685
30 Day Avg. Volume762,397
Financial Highlights & Ratios
PEG Ratio1.35
Price to Book (P/B)N/A
Price to Sales (P/S)7.52
Price to Cash Flow (P/CF)18.90
P/FCF Ratio38.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$119.92Price Target Upside16.40% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
Federal Realty Business Overview & Revenue Model
Company DescriptionFederal Realty Investment Trust is an equity real estate investment trust, which engages in the ownership, management and redevelopment of high quality retail focus properties. The company was founded by Samuel J. Gorlitz in 1962 and is headquartered in Rockville, MD.
How the Company Makes MoneyFederal Realty makes money primarily through leasing space in its portfolio of retail and mixed-use properties to tenants, which include national retailers, local businesses, restaurants, and service providers. Rental income from these leases forms the core revenue stream for the company. Additionally, Federal Realty generates income through property management fees and redevelopment projects that enhance the value and attractiveness of its properties. The company strategically invests in high-demand areas, enabling it to command premium rents and maintain high occupancy rates. Partnerships with retail brands and developers further contribute to its earnings by driving foot traffic and increasing property utilization.
Federal Realty Financial Statement Overview
Summary
Federal Realty demonstrates strong financial health with robust revenue growth, healthy profit margins, and effective cash flow management. The company has improved leverage management and maintains strong profitability.Income Statement
Federal Realty has exhibited strong revenue growth, increasing from $951.2M in 2021 to $1.2B in 2024. The gross profit margin has been robust, maintaining around 67%, and the net profit margin improved to 24.5% in 2024. EBIT and EBITDA margins are healthy at 39.3% and 67.8%, respectively. The company shows strong profitability and growth potential.85
Very Positive
Balance Sheet
The debt-to-equity ratio has decreased to 0.22 in 2024, indicating improved leverage management. Return on Equity (ROE) is strong at 9.3%. The equity ratio shows a stable financial structure, with equity comprising 37.2% of total assets. The company has been managing its liabilities well while maintaining adequate equity levels.78
Positive
Cash Flow
Operating cash flow is strong, increasing to $574.6M in 2024, and free cash flow has grown significantly. The operating cash flow to net income ratio is 1.95, indicating efficient cash generation relative to net earnings. Free cash flow to net income is above 1, showing good conversion of earnings into cash. Cash management appears effective with solid cash generation and deployment.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.20B | 1.13B | 1.07B | 951.22M | 835.49M | Gross Profit |
| 810.65M | 769.06M | 717.60M | 634.61M | 545.33M | EBIT |
| 472.36M | 406.47M | 368.79M | 306.83M | 289.52M | EBITDA |
| 822.41M | 736.79M | 828.82M | 674.70M | 544.55M | Net Income Common Stockholders |
| 295.21M | 236.99M | 254.74M | 132.56M | 3.48M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 123.41M | 250.82M | 85.56M | 162.13M | 798.33M | Total Assets |
| 8.52B | 8.44B | 8.23B | 7.62B | 7.61B | Total Debt |
| 689.03M | 4.69B | 4.47B | 4.19B | 4.44B | Net Debt |
| 565.63M | 4.44B | 4.39B | 4.03B | 3.64B | Total Liabilities |
| 5.10B | 5.21B | 5.02B | 4.75B | 4.92B | Stockholders Equity |
| 3.17B | 2.96B | 2.95B | 2.58B | 2.46B |
| Cash Flow | Free Cash Flow | |||
| 574.56M | 244.71M | 100.07M | 30.84M | -132.01M | Operating Cash Flow |
| 574.56M | 555.83M | 516.77M | 471.35M | 369.93M | Investing Cash Flow |
| -446.83M | -358.32M | -786.00M | -660.12M | -368.38M | Financing Cash Flow |
| -252.30M | -33.85M | 190.41M | -452.97M | 661.74M |
Federal Realty Technical Analysis
Negative
103.02
Price Trends
107.32
Negative
109.84
Negative
107.86
Negative
Market Momentum
-1.07
Positive
37.96
Neutral
41.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRT, the sentiment is Negative. The current price of 103.02 is below the 20-day moving average (MA) of 107.03, below the 50-day MA of 107.32, and below the 200-day MA of 107.86, indicating a bearish trend. The MACD of -1.07 indicates Positive momentum. The RSI at 37.96 is Neutral, neither overbought nor oversold. The STOCH value of 41.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FRT.
Federal Realty Risk Analysis
Federal Realty disclosed 14 risk factors in its most recent earnings report. Federal Realty 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
Federal Realty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $8.55B | 25.10 | 11.37% | 3.95% | 3.41% | 10.54% | |
76 Outperform | $69.22B | 24.33 | <0.01% | 4.31% | 5.40% | 8.57% | |
72 Outperform | $8.89B | 30.11 | 9.31% | 4.15% | 6.21% | 22.32% | |
71 Outperform | $13.93B | 36.14 | 5.82% | 3.49% | 10.15% | 3.36% | |
63 Neutral | $14.62B | 38.94 | 3.86% | 4.40% | 14.51% | -45.53% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
52 Neutral | $4.66B | ― | -7.04% | 3.69% | 4.88% | -66.88% |
* Real Estate Sector Average
Performance Comparison
FRT
Federal Realty
103.02
5.30
5.42%
KIM
Kimco Realty
21.51
2.83
15.15%
MAC
Macerich
17.79
2.43
15.82%
REG
Regency Centers
76.35
17.40
29.52%
SPG
Simon Property
183.58
38.69
26.70%
BRX
Brixmor Property
27.28
5.55
25.54%
Federal Realty Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -7.87% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong leasing performance, record revenue, and a promising development and acquisition pipeline, indicating a positive outlook for future growth. However, challenges such as higher interest expenses and timing delays on certain projects were noted. Overall, the positives significantly outweighed the negatives.Highlights
Record-Breaking Leasing Performance
Achieved 649,000 square feet of leasing in Q4 at 10% more cash rent and 21% more straight-line rent compared to previous leases. Total leasing for 2024 reached nearly 2.4 million square feet, marking a 9% increase over previous records.
Occupancy and Revenue Growth
Occupancy reached 96.2% on a lease basis and 94.1% on an occupied basis, the highest in nearly a decade. Total revenues surpassed $300 million in Q4 and $1.2 billion for the year, growing 7% and 6% over prior periods, respectively.
Promising Development and Acquisition Plans
Approved new developments in Hoboken, NJ, and Philadelphia, PA, with expected yields of 6% to 8%. Additionally, a $123.5 million acquisition in Northern California is expected to close soon.
Strong Financial Metrics
FFO per share for the year was $6.77, reflecting a 4% growth. POI increased by 5.4% for the full year and 6.8% for Q4.
Improved Financial Flexibility
Net debt to EBITDA improved to 5.5 times, and liquidity stood at $1.4 billion, with no material debt maturities in 2025.
Lowlights
Interest Expense Pressure
Higher interest expenses applied pressure to property level expense margins compared to 2023.
Timing Delays Impacting FFO
A net drag of $0.10 to $0.11 is expected in 2025 from One Santana West due to the cessation of interest capitalization.
Seasonality and Expense Expectations
Expected step back in occupancy in Q1 of 2025 due to typical seasonality, impacting short-term FFO growth.
Company Guidance
In the fourth quarter of fiscal year 2024, the company achieved significant milestones, including setting records in leasing, occupancy, and financial performance. The company completed 100 comparable deals totaling 649,000 square feet, with cash rent increasing by 10% and straight-line rent by 21% compared to previous leases. Over the year, 2.4 million square feet of space were leased at 11% higher cash rent and 22% higher straight-line rent. Occupancy reached 96.2% on a lease basis and 94.1% on an occupied basis, marking the highest levels in nearly a decade. The company raised its dividends to $4.40 per share for the 57th consecutive year and achieved total revenues exceeding $300 million for the quarter and $1.2 billion for the year, growing 7% and 6%, respectively. Funds from operations (FFO) per share hit record highs at $1.73 for the quarter and $6.77 for the year, even after a one-time four-cent charge due to an executive's departure. Excluding the charge, FFO per share was $1.77 for the quarter and $6.81 for the year, reflecting growth of 7.9% and 4%, respectively. The company anticipates continued growth in 2025, supported by a strong retail real estate market, favorable supply-demand dynamics, and a diverse portfolio with resilient operators.Federal Realty Corporate Events
Executive/Board ChangesPrivate Placements and FinancingBusiness Operations and Strategy
Federal Realty Expands Equity Distribution Agreement to $750M
Positive
Feb 14, 2025
On February 12, 2025, Federal Realty Investment Trust’s Board of Trustees’ Compensation Committee approved a modified compensation arrangement for Daniel Guglielmone, the Executive Vice President-Chief Financial Officer and Treasurer, including a base salary of $650,000, an annual bonus target of 150% of the base salary, and an annual target under the long-term incentive award program of $1,500,000. In a strategic move to strengthen its financial positioning, the company announced the Second Amendment to their equity distribution agreement, increasing the aggregate offering price of shares to $750,000,000 from February 14, 2025, which marks a significant increase from the previous $500,000,000 cap set on March 8, 2024, aiming to enhance its capital-raising efforts.
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.