Federal Realty (FRT) AI Stock Analysis

• Market Cap: $8.82B
• Dividend Yield: 4.38%
• Average Volume (3M): 610.28K
• Price to Earnings (P/E): 25.8
• Beta (1Y): 0.53
• Revenue Growth: 6.05%
• EPS Growth: 14.70%
• Country: US
• Employees: 304
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Retail
• EPS (TTM): 0.69
• Shares Outstanding: 86,270,035
• 10 Day Avg. Volume: 577,155
• 30 Day Avg. Volume: 610,282
• PEG Ratio: 1.43
• Price to Book (P/B): 2.95
• Price to Sales (P/S): 7.78
• P/FCF Ratio: 28.54
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 7.60
• Enterprise Value/Gross Profit: 11.29
• Enterprise Value/Ebitda: 10.67
• 1Y Price Target: $110.54
• Price Target Upside: 8.59% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: $109.00 ▲(7.07% Upside)

Federal Realty's overall stock score reflects its strong financial performance and positive earnings call, which highlight robust leasing activity and strategic growth initiatives. The attractive dividend yield adds to its appeal. However, technical analysis indicates mixed signals, and the high P/E ratio suggests potential overvaluation. Investors should consider these factors when evaluating the stock's potential.

Positive Factors

Strong Leasing Performance

The record leasing activity signifies robust demand for Federal Realty's properties, enhancing revenue stability and supporting long-term growth through increased rental income.

Increased Guidance

The increased guidance indicates management's confidence in future performance, driven by strategic initiatives and strong operational execution, which could lead to sustained financial growth.

Strategic Acquisitions

Strategic acquisitions enhance Federal Realty's portfolio and income potential, providing opportunities for value appreciation and improved returns over time.

Negative Factors

Occupancy Challenges

Lower occupancy rates in recent acquisitions may limit immediate revenue generation and require additional efforts to achieve full potential, impacting short-term financial performance.

Impact of Capitalized Interest

The negative impact of capitalized interest on FFO highlights potential cost management challenges, which could affect profitability if not addressed.

Reliance on Debt Financing

A higher reliance on debt financing can pose risks to financial stability, especially if market conditions change, potentially impacting long-term sustainability.

Federal Realty Business Overview & Revenue Model

Company Description

Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 106 properties include approximately 3,100 tenants, in 25 million square feet, and approximately 3,200 residential units. Federal Realty has increased its quarterly dividends to its shareholders for 54 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT. For additional information about Federal Realty and its properties, visit www.federalrealty.com.

How the Company Makes Money

Federal Realty generates revenue primarily through rental income from its diverse portfolio of retail and mixed-use properties. The company leases space to a variety of tenants, including well-known national and local retailers, restaurants, and service providers, which contributes significantly to its earnings. Additionally, FRT earns revenue from property management services and development projects, where it may engage in redevelopment or renovation of existing properties to increase their value and rental income potential. The company also benefits from long-term leases with its tenants, which provide predictable cash flows. Strategic partnerships with retailers and developers further enhance its revenue-generating capabilities, as these collaborations can lead to innovative property uses and increased foot traffic. Overall, the combination of rental income, property management, and development activities creates a robust revenue model for Federal Realty.

Federal Realty Financial Statement Overview

Summary

Federal Realty demonstrates strong financial health with consistent revenue growth, robust profitability margins, and improved cash flow generation. The balance sheet shows a significant reduction in leverage, enhancing financial stability. However, the relatively low equity ratio suggests a higher reliance on debt financing, which could pose risks if market conditions change.

Income Statement

Federal Realty's income statement shows strong performance with consistent revenue growth and solid profitability margins. The TTM data indicates a gross profit margin of 67.29% and a net profit margin of 27.65%, both of which are robust for the industry. The EBIT and EBITDA margins are also healthy, reflecting efficient operations. The revenue growth rate of 1.51% in the TTM period suggests steady growth, although it has slowed compared to previous years.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.29 in the TTM period, significantly improved from previous years. The return on equity (ROE) is 10.82%, indicating effective use of equity to generate profits. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing, which could pose risks if market conditions change.

Cash Flow

Cash flow analysis reveals a strong free cash flow growth rate of 53.91% in the TTM period, indicating improved cash generation capabilities. The operating cash flow to net income ratio of 0.64 suggests efficient conversion of income into cash. The free cash flow to net income ratio of 0.89 is also favorable, highlighting the company's ability to generate cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.25B	1.20B	1.13B	1.07B	951.22M	835.49M
Gross Profit	844.71M	810.65M	769.06M	717.60M	634.61M	545.33M
EBITDA	893.90M	822.41M	736.79M	835.06M	676.75M	527.20M
Net Income	346.87M	295.21M	236.99M	385.49M	261.50M	131.71M
Balance Sheet
Total Assets	8.86B	8.52B	8.44B	8.23B	7.62B	7.61B
Cash, Cash Equivalents and Short-Term Investments	111.31M	123.41M	250.82M	85.56M	162.13M	798.33M
Total Debt	4.81B	4.56B	4.69B	4.47B	4.19B	4.44B
Total Liabilities	5.40B	5.10B	5.21B	5.02B	4.75B	4.92B
Stockholders Equity	3.21B	3.17B	2.96B	2.95B	2.58B	2.46B
Cash Flow
Free Cash Flow	532.77M	327.80M	244.71M	100.07M	30.84M	-132.01M
Operating Cash Flow	597.13M	574.56M	555.83M	516.77M	471.35M	369.93M
Investing Cash Flow	-544.88M	-446.83M	-358.32M	-786.00M	-660.12M	-368.38M
Financing Cash Flow	-30.16M	-252.30M	-33.85M	190.41M	-452.97M	661.74M

Federal Realty Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 101.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FRT, the sentiment is Positive. The current price of 101.8 is above the 20-day moving average (MA) of 100.51, above the 50-day MA of 97.81, and above the 200-day MA of 94.64, indicating a bullish trend. The MACD of 1.07 indicates Negative momentum. The RSI at 60.55 is Neutral, neither overbought nor oversold. The STOCH value of 78.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRT.

Federal Realty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NNN	78 Outperform	$7.79B	19.66	8.91%	6.04%	4.53%	-3.46%
FRT	77 Outperform	$8.82B	25.83	10.92%	4.38%	6.05%	14.70%
ADC	73 Outperform	$8.10B	41.25	3.47%	4.28%	14.67%	-5.17%
REG	70 Outperform	$12.75B	31.90	6.07%	4.15%	5.38%	3.13%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
BRX	65 Neutral	$7.86B	23.78	11.36%	4.41%	6.07%	-0.28%
KRG	61 Neutral	$5.06B	208.01	4.71%	4.55%	3.67%	―