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Nexus Real Estate Investment Trust (TSE:NXR.UN)
TSX:NXR.UN

Nexus Real Estate Investment (NXR.UN) AI Stock Analysis

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Nexus Real Estate Investment

(TSX:NXR.UN)

Rating:78Outperform
Price Target:
C$8.00
▲(10.04%Upside)
Nexus Industrial REIT demonstrates robust financial performance and strategic positioning within the industrial REIT sector. Strong revenue growth, an attractive valuation, and effective strategic repositioning are significant strengths. However, technical indicators suggest caution, and challenges such as tenant credit risks and market slowdowns present risks. Overall, the stock remains a solid investment with positive long-term prospects.
Positive Factors
Balance Sheet
Dispositions are favourably impacting the balance sheet and portfolio composition.
Development Projects
Lease-up/completion of several development projects is also a source of potential upside.
Financial Performance
$10M of annualized NOI upside potential from recent and soon-to-be-completed developments.
Negative Factors
Leverage
Neutral stance reflects NXR's above-average leverage and payout ratio vs. peers, as well as lingering concerns with respect to certain legacy properties.

Nexus Real Estate Investment (NXR.UN) vs. iShares MSCI Canada ETF (EWC)

Nexus Real Estate Investment Business Overview & Revenue Model

Company DescriptionNexus Real Estate Investment Trust (NXR.UN) is a Canadian real estate investment trust focused on acquiring and managing a diversified portfolio of commercial properties. The company primarily invests in industrial, office, and retail sectors across major Canadian markets, aiming to provide stable and growing cash distributions to its unitholders through strategic property acquisitions and active asset management.
How the Company Makes MoneyNexus Real Estate Investment Trust generates revenue primarily through rental income from its portfolio of commercial properties. The trust leases space to a variety of tenants, including businesses in the industrial, office, and retail sectors. Revenue is further supported by property management fees and potential capital appreciation from strategic property acquisitions and disposals. The company benefits from long-term lease agreements, which provide consistent cash flow, and actively manages its properties to enhance value and occupancy rates. Additionally, Nexus may engage in joint ventures or partnerships to expand its investment opportunities and leverage its expertise in real estate management.

Nexus Real Estate Investment Earnings Call Summary

Earnings Call Date:May 14, 2025
(Q1-2025)
|
% Change Since: 2.68%|
Next Earnings Date:Aug 08, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook overall due to successful strategic repositioning, strong leasing performance, and income growth. However, challenges persist with economic conditions and tenant issues, slightly tempering the enthusiasm.
Q1-2025 Updates
Positive Updates
Strategic Repositioning Completion
Nexus Industrial REIT completed its strategic repositioning by selling 15 of its 16 retail properties, making it a Canada-focused pure play industrial REIT.
Robust Industrial Occupancy
Industrial occupancy increased to 97% in the first quarter, with successful lease renewals and pre-leasing exceeding expectations.
Net Operating Income Growth
Total net operating income increased by $2.6 million or 8.6% to $32.1 million, driven by acquisitions, organic growth, and development.
Strong Lease Renewals
Over 80% of expiring GLA was renewed, with a 30% growth on expiring rents, adding $3.5 million to NOI.
Positive Development Progress
Significant progress in development projects, including a 325,000 sq ft expansion in St. Thomas and a new 115,000 sq ft building in Calgary.
Negative Updates
Economic Challenges Due to Tariff War
The ongoing tariff war is negatively impacting the Canadian industrial sector, though Nexus remains relatively insulated.
Tenant Creditor Protection
Two tenants entered creditor protection, potentially impacting 2025 results, though rent was paid through April.
Unleased Property in Hamilton
A 115,000 sq ft project in Hamilton remains unleased, presenting challenges in a tough market.
Red Deer Tenant Exit
PV Mart terminated its lease in Red Deer, with expectations of a longer time to find a new tenant.
Company Guidance
In the first quarter of 2025, Nexus Industrial REIT provided robust guidance, highlighting several key metrics and strategic actions. The REIT completed the sale of 15 out of 16 retail properties for $47 million, marking a strategic shift to become a Canada-focused pure-play industrial REIT with over 99% of its Net Operating Income (NOI) derived from industrial assets. The REIT's industrial occupancy rose to 97%, and it achieved a 6.6% growth in industrial same-property NOI, contributing to a total NOI increase of $2.6 million or 8.6% year-over-year. The company reported a normalized Adjusted Funds From Operations (AFFO) of $0.1504 per unit, up from $0.1305 per unit the prior year. Development projects are advancing with anticipated unlevered returns of 9% and 11% on new properties in St. Thomas and Calgary, respectively. Despite economic challenges, the REIT expects mid-single-digit industrial same-property NOI growth for the year.

Nexus Real Estate Investment Financial Statement Overview

Summary
Nexus Real Estate Investment shows strong financial performance with consistent revenue growth, solid profitability margins, and efficient cash flow management. Despite increased leverage, the company's financial health remains stable, with a focus on maintaining a strong cash position and effective capital allocation. The fluctuations in net income and ROE suggest potential areas for improved financial stability.
Income Statement
82
Very Positive
Nexus Real Estate Investment has demonstrated robust revenue growth from 2019 to 2024, with a notable increase in total revenue from $60 million in 2019 to $175.7 million in 2024. The Gross Profit Margin improved significantly from 63.2% in 2019 to 71.6% in 2024. However, the Net Profit Margin fluctuated, peaking in 2021 due to a substantial net income but declining in subsequent years. EBITDA Margin remains strong, reflecting efficient operational performance.
Balance Sheet
74
Positive
The company's Debt-to-Equity Ratio increased from 1.14 in 2019 to 1.18 in 2024, indicating higher leverage but manageable within the industry norms. Return on Equity (ROE) showed volatility, with a high of 21.7% in 2021, reflecting exceptional net income, followed by a decrease in subsequent years. The Equity Ratio declined slightly over the years, suggesting an increase in liabilities relative to total assets.
Cash Flow
78
Positive
Operating Cash Flow remains strong, although it decreased from $51 million in 2023 to $38.96 million in 2024. Free Cash Flow was positive and stable, despite a slight decline from the previous year. The Free Cash Flow to Net Income Ratio was robust, highlighting the company's ability to convert net income into free cash flow effectively.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
175.70M157.65M137.12M83.56M61.39M
Gross Profit
125.87M111.97M95.81M55.95M39.23M
EBIT
118.05M103.32M142.28M-25.88M41.53M
EBITDA
145.87M201.67M142.37M-14.93M41.62M
Net Income Common Stockholders
90.88M160.03M91.75M146.36M14.84M
Balance SheetCash, Cash Equivalents and Short-Term Investments
11.53M5.92M11.53M82.28M13.99M
Total Assets
2.60B2.46B1.97B1.66B710.50M
Total Debt
1.25B1.19B827.11M679.55M342.72M
Net Debt
1.24B1.18B815.57M597.27M328.72M
Total Liabilities
1.54B1.46B1.09B968.67M410.92M
Stockholders Equity
1.06B1.00B872.54M689.48M299.58M
Cash FlowFree Cash Flow
24.70M32.08M30.32M19.62M18.69M
Operating Cash Flow
38.96M51.02M41.53M25.00M24.35M
Investing Cash Flow
-78.60M-345.99M-315.73M-469.25M-45.07M
Financing Cash Flow
45.26M289.36M203.45M512.54M26.84M

Nexus Real Estate Investment Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price7.27
Price Trends
50DMA
6.82
Positive
100DMA
7.02
Positive
200DMA
7.44
Negative
Market Momentum
MACD
0.12
Negative
RSI
53.88
Neutral
STOCH
37.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NXR.UN, the sentiment is Neutral. The current price of 7.27 is above the 20-day moving average (MA) of 6.99, above the 50-day MA of 6.82, and below the 200-day MA of 7.44, indicating a neutral trend. The MACD of 0.12 indicates Negative momentum. The RSI at 53.88 is Neutral, neither overbought nor oversold. The STOCH value of 37.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:NXR.UN.

Nexus Real Estate Investment Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$666.23M8.267.47%8.90%9.21%-61.37%
75
Outperform
C$905.00M8.125.83%4.25%3.85%-31.81%
67
Neutral
C$478.16M5.259.03%4.05%-0.29%
60
Neutral
$2.76B10.590.51%8507.90%5.51%-19.44%
58
Neutral
C$712.53M-1.80%8.34%-13.42%86.55%
57
Neutral
C$571.74M-37.33%6.35%-7.34%-966.70%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:NXR.UN
Nexus Real Estate Investment
7.27
0.79
12.23%
TSE:AX.UN
Artis Real Estate Investment
7.26
1.35
22.82%
TSE:ERE.UN
European Residential Real Estate ate Investment Trust
2.51
1.20
91.60%
TSE:MRG.UN
Morguard NA REIT UN
18.12
3.40
23.10%
TSE:MI.UN
Minto Apartment Real Estate Investment Trust
13.71
-0.40
-2.83%

Nexus Real Estate Investment Corporate Events

Business Operations and StrategyFinancial Disclosures
Nexus Industrial REIT Reports Strong Q1 2025 Results Amid Strategic Shift
Positive
May 15, 2025

Nexus Industrial REIT announced a successful first quarter of 2025, highlighted by an 8.6% increase in net operating income driven by strategic acquisitions and developments. The company completed its transition to a pure-play industrial REIT, selling 15 retail and one office property to focus on industrial assets, which now account for over 99% of its NOI. This strategic shift positions Nexus to better withstand economic challenges, with a strong start to 2025 leasing activities and significant ongoing development projects expected to enhance future income. The REIT’s financial performance was bolstered by increased occupancy rates and successful lease renewals, demonstrating the strength of its tenant relationships and portfolio quality.

The most recent analyst rating on ($TSE:NXR.UN) stock is a Buy with a C$8.00 price target. To see the full list of analyst forecasts on Nexus Real Estate Investment stock, see the TSE:NXR.UN Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Nexus Industrial REIT Completes Strategic Asset Sale and Reports Leasing Success
Positive
Apr 8, 2025

Nexus Industrial REIT has announced the sale of its 50% ownership in 15 retail buildings and one office building in Quebec for a total of $51 million. The proceeds will be used to repay debt and fund development projects, marking the company’s transition to a pure-play industrial REIT in Canada. The company has also reported a strong start to its 2025 leasing activities, renewing over 80% of its expiring gross leasable area and securing significant rent increases, which will enhance its net operating income.

Financial Disclosures
Nexus Industrial REIT to Release Q1 2025 Financial Results
Neutral
Apr 2, 2025

Nexus Industrial REIT announced its plan to release the financial results for the first quarter of 2025 on May 15, 2025, before the opening of the TSX. The announcement includes a scheduled conference call to discuss the results and operations, highlighting the company’s ongoing commitment to transparency and stakeholder engagement.

Business Operations and StrategyFinancial Disclosures
Nexus Industrial REIT Achieves Record Growth in 2024
Positive
Mar 10, 2025

Nexus Industrial REIT reported a significant growth in net operating income for the fourth quarter and full year 2024, driven by strategic acquisitions and development projects. The company has advanced its transition to a pure-play industrial REIT by selling non-core assets and completing new developments, contributing to a record net income and increased unitholders’ equity, positioning itself strongly in the industrial real estate market.

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.