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Eastgroup Properties (EGP)
:EGP
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Eastgroup Properties
(NYSE:EGP)
Rating:79Outperform
Price Target:
$193.00
▲(12.74%Upside)
Positive Factors
Financial Performance
EGP increased 2025 FFO/sh guidance by a penny to $8.91/sh, indicating confidence in future earnings.
Investment Opportunities
EGP trades at a 5.9% implied cap rate, an 11% discount to NAV, presenting an opportunity to own a high-quality REIT.
Leasing Activity
Leasing remained strong with 2.6 msf signed during 1Q25, which is a 4% increase compared to the previous year.
Negative Factors
Development and Capital
Updated guidance indicates a push out in the timeline for capital deployment and a reduction in development starts.
Market Performance
EGP is down -7.4% in the past month, underperforming compared to the VNQ, which is down -3%.
Regional Leasing Concerns
Concerns include EGP's steep drop in leasing spreads in SoCal, and more modest development starts and capital raising.
Eastgroup Properties (EGP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.99B
Dividend Yield3.19%
Average Volume (3M)315.67K
Price to Earnings (P/E)37.4
Beta (1Y)0.76
Revenue Growth11.92%
EPS Growth-0.83%
CountryUS
Employees101
SectorReal Estate
Sector Strength60
IndustryREIT - Industrial
Share Statistics
EPS (TTM)1.14
Shares Outstanding52,515,950
10 Day Avg. Volume282,480
30 Day Avg. Volume315,670
Financial Highlights & Ratios
PEG Ratio-19.99
Price to Book (P/B)2.61
Price to Sales (P/S)0.00
P/FCF Ratio21.34
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue4.05
Enterprise Value/Gross Profit23.53
Enterprise Value/Ebitda5.58
Forecast
1Y Price Target
$183.38Price Target Upside7.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Eastgroup Properties Business Overview & Revenue Model
Company DescriptionEastGroup Properties, Inc. (NYSE: EGP), an S&P MidCap 400 company, is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 15,000 to 70,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 45.8 million square feet.
How the Company Makes MoneyEastGroup Properties generates revenue primarily through the leasing of its industrial properties to a wide array of tenants in the logistics and supply chain sectors. The company's business model revolves around acquiring, developing, and managing strategically located industrial properties that are in high demand. Key revenue streams include rental income from long-term leases with tenants and property appreciation. The company also benefits from economies of scale and cost efficiencies gained by clustering properties in key markets, which enhances its ability to attract and retain tenants. Additionally, EastGroup Properties may engage in strategic partnerships and joint ventures to expand its portfolio and market reach, further contributing to its revenue generation.
Eastgroup Properties Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 6.68%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial performance, with significant growth in FFO and leasing metrics. However, challenges such as decreased occupancy, market uncertainties, and regional difficulties in Southern California were noted. The company remains optimistic with a strategic focus on leasing and financial flexibility.Q1-2025 Updates
Positive Updates
Record FFO Growth
Funds from operations (FFO) excluding involuntary conversions were $2.12 per share, up 7.1% year-over-year, continuing a decade-long trend of growth.
Strong Leasing Performance
Quarter-end leasing was at 97.3% with occupancy at 96.5%, and average quarterly occupancy was 95.8%. Quarterly releasing spreads were 47% GAAP and 31% cash.
Diversified Rent Roll
The top ten tenants now account for just 7.1% of rents, down 70 basis points from the previous year, indicating more diversified income sources.
Refinancing Savings
The company refinanced a $100 million unsecured term loan, reducing the credit spread by 30 basis points, resulting in $1.5 million in savings over five years.
Positive Development Yield
Development yields were strong, with a notable 9% yield on recent completions.
Negative Updates
Decrease in Average Occupancy
Average quarterly occupancy decreased by 170 basis points from the first quarter of 2024, from 97.5% to 95.8%.
Challenges in Southern California
Negative absorption in Los Angeles with nine consecutive quarters of negative net absorption, impacting leasing spreads.
Development Start Delays
Development starts were reduced by $50 million and delayed due to economic uncertainty, reducing capital proceeds by $190 million.
Tariff and Market Uncertainty
Tariff discussions and economic uncertainties are causing delays in leasing decisions, particularly in Los Angeles.
Company Guidance
In the first quarter of 2025, EastGroup Properties reported a robust performance, with funds from operations (FFO) excluding involuntary conversions reaching $2.12 per share, marking a 7.1% increase over the previous year. The company maintained a strong leasing momentum with a quarter-end leasing rate of 97.3% and an occupancy rate of 96.5%, though the average quarterly occupancy of 95.8% was down 170 basis points from Q1 2024. Releasing spreads were 47% on a GAAP basis and 31% in cash, while cash same-store NOI grew by 5.2% despite lower occupancy. The top ten tenants accounted for only 7.1% of rents, indicating a diversified rent roll. The company remains cautious about new investments, projecting $250 million in development starts for the year, mainly in the second half, due to economic uncertainties such as ongoing tariff discussions. EastGroup's strong balance sheet, with a debt-to-total market capitalization ratio of 13.7% and an interest coverage ratio of 15 times, positions it well for potential opportunistic investments.Eastgroup Properties Financial Statement Overview
Summary
Eastgroup Properties demonstrates a strong financial position with robust revenue growth and margins. The balance sheet is particularly strong with no debt and a healthy equity ratio. Cash flows are solid but show some volatility in investing activities.Income Statement
Eastgroup Properties demonstrates strong revenue growth with a notable increase in total revenue from $487.0M in 2022 to $488.5M in TTM (Trailing-Twelve-Months), indicating a positive growth trend. The gross profit margin remains robust at 63.8% in TTM, coupled with an impressive EBITDA margin of 115.8%. However, the net profit margin improved significantly to 34.6% in TTM, showing effective cost management and profitability improvement.85
Very Positive
Balance Sheet
The balance sheet is exceptionally strong, reflected by a debt-free position in TTM, which significantly reduces financial risk. The equity ratio stands at a healthy 65.5%, indicating a strong equity base. The return on equity is impressive at 5.1%, showcasing effective utilization of shareholder funds to generate profits.90
Very Positive
Cash Flow
The cash flow position is solid with a high operating cash flow to net income ratio of 2.56 in TTM, suggesting strong cash generation relative to net income. Free cash flow also shows positive growth, increasing to $413.4M in TTM. However, fluctuations in cash flow from investing activities could suggest potential volatility in capital investments.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 661.11M | 640.23M | 570.59M | 487.02M | 409.48M | 363.02M | Gross Profit |
| 437.47M | 466.02M | 416.56M | 353.11M | 294.40M | 259.65M | EBIT |
| 262.96M | 255.21M | 228.14M | 183.77M | 151.72M | 129.17M | EBITDA |
| 459.72M | 444.62M | 399.22M | 337.41M | 278.82M | 245.53M | Net Income Common Stockholders |
| 228.53M | 227.75M | 200.49M | 186.18M | 123.78M | 73.49M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 20.52M | 17.53M | 40.26M | 56.00K | 4.39M | 21.00K | Total Assets |
| 5.11B | 5.08B | 4.52B | 4.04B | 3.22B | 2.72B | Total Debt |
| 1.49B | 1.55B | 1.70B | 1.88B | 1.48B | 1.32B | Net Debt |
| 1.47B | 1.53B | 1.66B | 1.88B | 1.47B | 1.32B | Total Liabilities |
| 1.76B | 1.78B | 1.91B | 2.08B | 1.64B | 1.45B | Stockholders Equity |
| 3.34B | 3.29B | 2.61B | 1.95B | 1.57B | 1.27B |
| Cash Flow | Free Cash Flow | ||||
| 413.35M | 416.59M | 338.20M | 275.65M | 223.19M | 163.15M | Operating Cash Flow |
| 433.39M | 416.59M | 338.20M | 316.50M | 256.49M | 196.28M | Investing Cash Flow |
| -677.22M | -724.34M | -570.06M | -521.15M | -529.26M | -288.26M | Financing Cash Flow |
| 248.72M | 285.02M | 272.06M | 200.31M | 277.14M | 91.77M |
Eastgroup Properties Technical Analysis
Positive
171.19
Price Trends
165.49
Positive
170.06
Positive
171.39
Negative
Market Momentum
0.93
Negative
56.51
Neutral
64.74
Neutral
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 171.19 is above the 20-day moving average (MA) of 169.51, above the 50-day MA of 165.49, and below the 200-day MA of 171.39, indicating a neutral trend. The MACD of 0.93 indicates Negative momentum. The RSI at 56.51 is Neutral, neither overbought nor oversold. The STOCH value of 64.74 is Neutral, 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 1 New Risks
1.
Deficiencies in internal control over financial reporting could adversely affect our business. Q4, 2024
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 |
|---|---|---|---|---|---|---|---|
79 Outperform | $8.99B | 37.40 | 7.61% | 3.19% | 11.92% | -0.83% | |
77 Outperform | $6.87B | 27.81 | 7.15% | 4.03% | 8.81% | 33.30% | |
74 Outperform | $8.53B | 29.27 | 3.35% | 4.67% | 18.02% | 12.12% | |
73 Outperform | $6.76B | 24.58 | 10.18% | 3.14% | 9.18% | -7.05% | |
68 Neutral | $6.10B | 29.83 | 5.33% | 3.25% | 22.17% | 4.34% | |
68 Neutral | $2.57B | 44.40 | 2.98% | 6.10% | 5.68% | 358.78% | |
61 Neutral | $2.83B | 10.92 | 0.41% | 8438.90% | 5.75% | -21.03% |
* Real Estate Sector Average
Performance Comparison
EGP
Eastgroup Properties
171.19
10.38
6.45%
STAG
Stag Industrial
36.82
3.26
9.71%
TRNO
Terreno Realty
59.03
4.31
7.88%
FR
First Industrial Realty
49.55
4.74
10.58%
LXP
LXP Industrial Trust
8.69
0.51
6.23%
REXR
Rexford Industrial Realty
36.03
-6.34
-14.96%
Eastgroup Properties Corporate Events
Executive/Board ChangesShareholder Meetings
EastGroup Properties Confirms Board and Auditor Decisions
Neutral
May 27, 2025
On May 22, 2025, EastGroup Properties, Inc. held its annual meeting of shareholders, where the election of seven directors to the Board was confirmed, KPMG LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025, and the compensation of the Company’s named executive officers was approved on a non-binding advisory basis. These decisions reflect the company’s commitment to maintaining strong governance and financial oversight, potentially impacting its strategic direction and stakeholder confidence.
The most recent analyst rating on (EGP) stock is a Hold with a $175.00 price target. To see the full list of analyst forecasts on Eastgroup Properties stock, see the EGP Stock Forecast page.
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.