Sun Communities Inc. (NYSE: SUI) has confirmed the release date for its fiscal Q4 2021 earnings report, which will be on Monday, February 21, 2022, after market close.
What to look for:
Earnings: Stockearning’s Estimated EPS for Q4 is expected to be around $1.30 per share. In the third quarter, the company produced an earnings surprise of 5.5% with actual EPS of $2. When the company released its Q3 2021 results, it indicated that full-year earnings would range between $3.42 and $3.48 per share, with core FFO per diluted share ranging between $6.44 and $6.5. Historical EPS performance shows that in the past 12 quarters, the company has topped EPS once (2%) met once (2%) and missed 33 times (94%).
Revenue: In the third quarter, the company had total revenue of $684.3 million, representing a YoY increase of 70.9% relative to $400.5 million a year before. For the nine months ending September 30, 2021, the company reported revenue of $1.7 billion, a YoY increase of 70.6%.
Stock movement: SUI shares have lost 6.3% since the company released its third-quarter earnings. Interestingly, the company's shares have been UP 28 times out of the past 48 quarters. So, the historical price reaction suggests a 58% probability of the share price going UP following the fiscal Q4 2021 earnings release. According to the Stockearning algorithm, the predicted first-day move is +/-1%, while the predicted move on the seventh day is +/-2%.
What analysts are saying: Citi analyst Nicholas Joseph resumed coverage in SUI with a Buy rating and price target of $225 following Park Holidays’ acquisition and completed a forward equity raise of $740 million. Although the analyst is generally supportive of the accretive purchase, he does see some risks related to the company's overall business strategy.
RBC Capital analyst Brad Heffern raised his price target on the stock from $216 to $227 and maintained a Buy rating in the shares. The analyst writes in a research note that the Sun Communities' Park Holidays purchase should be "highly accretive" due to the large gap between its trading and purchase multiples. According to Heffern, the deal also creates a runway for more growth from future EU acquisitions as well as a cheaper capital cost from European debt raising.
BMO Capital’s John Kim raised his price target in the stock from $215 to $225 and maintained a Buy rating SUI shares. Following the purchase of Park Holidays by the firm and comments from a recent NAREIT meeting, the analyst raised his projections. Kim predicts that the transaction will be 7.3 percent accretive on a yearly basis and that it will allow the company to take advantage of lower-cost UK debt to its full potential.
Recently Barclays analyst Anthony Powell commenced coverage on the stock with a Buy rating and price target of $232. The analyst began coverage of the US real estate investment trust (REIT) sector with an optimistic outlook. Even after the recent equity outperformance, he favours Sunbelt names, claiming that robust population and earnings growth can help generate higher rent increases. Powell's preferred segment is industrial, where he thinks demand for warehouses will continue high. In a research note, the analyst told investors that the "retail apocalypse" is overstated since shopping centre dynamics have "surprised us to the upside." Despite obvious issues such as Covid and retail relocating to the internet, shopping centre visitation is largely returning to 2019 levels, according to the analyst, who also claims that leasing demand and price have remained high.
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