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Eastgroup Properties (EGP)
NYSE:EGP

Eastgroup Properties (EGP) AI Stock Analysis

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Eastgroup Properties

(NYSE:EGP)

Rating:80Outperform
Price Target:
$195.00
â–²(14.79%Upside)
Eastgroup Properties has a strong financial foundation with impressive revenue and profit margins, bolstered by a debt-free balance sheet. Technical indicators suggest stable performance, while valuation metrics indicate potential overvaluation. The earnings call reflects robust growth and strategic focus, though regional challenges and market uncertainties remain. Overall, the company is well-positioned for growth, but investors should be mindful of valuation and regional risks.
Positive Factors
Earnings
Moody’s Ratings affirmed EastGroup’s issuer rating of Baa2 and changed its rating outlook from stable to positive.
Financial Performance
EGP trades at a 5.9% implied cap rate, an 11% discount to NAV, presenting an opportunity to own a high-quality REIT.
Leasing Performance
EastGroup successfully released the entire space that Conn's rejected at a 20% higher rate.
Negative Factors
Development and Capital Deployment
Updated guidance indicates a push out in the timeline for capital deployment and a reduction in development starts.
Leasing Trends
Concerns include EGP's steep drop in leasing spreads in SoCal, and more modest development starts and capital raising.
Market Performance
EGP is down -7.4% in the past month, underperforming compared to the VNQ, which is down -3%.

Eastgroup Properties (EGP) vs. SPDR S&P 500 ETF (SPY)

Eastgroup Properties Business Overview & Revenue Model

Company DescriptionEastGroup Properties (EGP) is a publicly traded real estate investment trust (REIT) that specializes in the development, acquisition, and operation of industrial properties in major Sunbelt markets throughout the United States. The company focuses on providing state-of-the-art distribution facilities to a diverse range of tenants, primarily targeting the supply chain and logistics sectors. EastGroup Properties primarily serves businesses that require efficient warehousing and distribution solutions for their operations.
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: 6.76%|
Next Earnings Date:Jul 23, 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 strong financial health with significant revenue growth, a robust balance sheet with no debt, and a solid cash flow position. The company's high equity ratio and impressive net profit margin further underscore its financial stability and efficiency.
Income Statement
85
Very Positive
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.
Balance Sheet
90
Very Positive
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.
Cash Flow
78
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue661.11M640.23M570.59M487.02M409.48M363.02M
Gross Profit437.47M466.02M416.56M353.11M294.40M259.65M
EBITDA459.72M444.62M399.22M337.41M278.82M245.53M
Net Income228.53M227.75M200.49M186.18M123.78M73.49M
Balance Sheet
Total Assets5.11B5.08B4.52B4.04B3.22B2.72B
Cash, Cash Equivalents and Short-Term Investments20.52M17.53M40.26M56.00K4.39M21.00K
Total Debt1.49B1.55B1.70B1.88B1.48B1.32B
Total Liabilities1.76B1.78B1.91B2.08B1.64B1.45B
Stockholders Equity3.34B3.29B2.61B1.95B1.57B1.27B
Cash Flow
Free Cash Flow413.35M416.59M338.20M275.65M223.19M163.15M
Operating Cash Flow433.39M416.59M338.20M316.50M256.49M196.28M
Investing Cash Flow-677.22M-724.34M-570.06M-521.15M-529.26M-288.26M
Financing Cash Flow248.72M285.02M272.06M200.31M277.14M91.77M

Eastgroup Properties Technical Analysis

Technical Analysis Sentiment
Positive
Last Price169.88
Price Trends
50DMA
167.37
Positive
100DMA
169.28
Positive
200DMA
169.04
Positive
Market Momentum
MACD
0.26
Positive
RSI
53.97
Neutral
STOCH
51.24
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 169.88 is above the 20-day moving average (MA) of 169.39, above the 50-day MA of 167.37, and above the 200-day MA of 169.04, indicating a bullish trend. The MACD of 0.26 indicates Positive momentum. The RSI at 53.97 is Neutral, neither overbought nor oversold. The STOCH value of 51.24 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 0 New Risks

Eastgroup Properties Peers Comparison

Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
EGEGP
80
Outperform
$8.92B37.127.61%3.30%11.92%-0.83%
77
Outperform
$6.98B27.677.15%4.07%8.81%33.30%
77
Outperform
$8.79B30.163.35%4.63%18.02%12.12%
FRFR
75
Outperform
$6.71B24.3910.18%3.62%9.18%-7.05%
67
Neutral
$5.91B28.885.33%3.43%22.17%4.34%
LXLXP
66
Neutral
$2.49B42.972.98%6.43%5.68%358.78%
53
Neutral
$1.21B3.28-0.13%7.06%-1.64%-127.47%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EGP
Eastgroup Properties
169.88
1.02
0.60%
STAG
Stag Industrial
36.64
2.27
6.60%
TRNO
Terreno Realty
57.16
-1.56
-2.66%
FR
First Industrial Realty
49.17
2.93
6.34%
LXP
LXP Industrial Trust
8.41
-0.31
-3.56%
REXR
Rexford Industrial Realty
37.13
-6.66
-15.21%

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
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 03, 2025