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Federal Realty (FRT)
NYSE:FRT
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Federal Realty
(NYSE:FRT)
Rating:73Outperform
Price Target:
$108.00
â–²(11.75%Upside)
Positive Factors
Asset Management
The company plans to sell $150 million of assets, which will provide financial flexibility.
Financial Performance
The company reported strong financial performance with Funds From Operations per share of $1.70, which is above market expectations.
Market Conditions
No slowdown in consumer traffic or retail leasing demand, suggesting strong market conditions.
Negative Factors
Analyst Preference
Analyst prefers less expensive retail REITs that may deliver similar growth levels in the near-term compared to FRT.
Development Impact
The temporary drag from development will be more pronounced in 2025 before the FFO benefit can be realized.
Government Spending
Near-term uncertainty in the Washington DC market is affecting FRT due to efforts to reduce federal government size and spending.
Federal Realty (FRT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.44B
Dividend Yield4.56%
Average Volume (3M)692.14K
Price to Earnings (P/E)28.1
Beta (1Y)0.71
Revenue Growth6.07%
EPS Growth24.23%
CountryUS
Employees304
SectorReal Estate
Sector Strength73
IndustryREIT - Retail
Share Statistics
EPS (TTM)0.72
Shares Outstanding86,260,740
10 Day Avg. Volume674,852
30 Day Avg. Volume692,142
Financial Highlights & Ratios
PEG Ratio0.37
Price to Book (P/B)2.73
Price to Sales (P/S)0.00
P/FCF Ratio80.63
Enterprise Value/Market Cap1.48
Enterprise Value/Revenue2.61
Enterprise Value/Gross Profit16.95
Enterprise Value/Ebitda3.86
Forecast
1Y Price Target
$110.55Price Target Upside14.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Federal Realty Business Overview & Revenue Model
Company DescriptionFederal Realty Investment Trust (FRT) is a leading real estate investment trust (REIT) specializing in the ownership, management, and redevelopment of high-quality retail and mixed-use properties. Founded in 1962 and headquartered in North Bethesda, Maryland, FRT focuses on densely populated, affluent communities in strategically selected metropolitan markets across the United States. Its portfolio includes a diverse range of shopping centers, urban mixed-use neighborhoods, and retail properties that are designed to provide vibrant, sustainable environments for tenants and consumers.
How the Company Makes MoneyFederal Realty makes money primarily through the leasing of retail, residential, and office spaces within its owned properties. The company's revenue model is based on collecting rental income from a diversified tenant base, including national retailers, local businesses, and residential tenants. FRT also generates income through strategic property redevelopments and enhancements, which can lead to increased occupancy rates and rental income. Additionally, the company benefits from the appreciation of property values over time, which can contribute to its financial stability and growth. Federal Realty's success is bolstered by its strategic focus on prime locations, strong tenant relationships, and effective property management practices.
Federal Realty Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 1.48%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
Federal Realty demonstrated strong financial and operational performance in Q1 2025, with high occupancy rates, robust leasing activity, and strong consumer traffic. However, the company faces challenges from economic uncertainty, tariff impacts, and higher property expenses. Despite these challenges, the overall sentiment is positive due to the company's resilience and proactive strategies.Q1-2025 Updates
Positive Updates
Strong Q1 Financial Performance
Federal Realty reported NAREIT FFO per share of $1.70 for Q1 2025, at the top end of guidance, representing nearly 4% growth year-over-year. Revenues increased by 6%, and Property Operating Income (POI) was up nearly 5%.
High Occupancy and Leasing Success
The comparable portfolio ended Q1 at 95.9% leased, 160 basis points higher than the previous year. The company executed 91 retail leases, representing 430,000 square feet, indicating strong tenant demand and successful leasing activities.
Resilient Consumer Traffic
Year-over-year foot traffic increased by 6% in Washington DC, 3% at Santana Row, and 11% in Boston, demonstrating strong consumer engagement at Federal Realty's properties.
Robust Office Leasing
Executed 118,000 square feet of office leases in Q1, including new deals at Santana West and Pike & Rose, with rents exceeding $50 per square foot, indicating strong demand in the office segment.
Healthy Financial Position
Improved liquidity position to roughly $1.5 billion, with leverage metrics improving, including a net debt to EBITDA of 5.7 times, down from 6 times the previous year.
Negative Updates
Tariff and Economic Uncertainty
The April 2nd tariff announcements and related capital market uncertainties have affected buyer confidence, requiring careful underwriting and capital allocation decisions.
Minimal Impact from Retail Bankruptcies
While Federal Realty has minimal exposure to bankrupt retailers like Jo-Ann's and Rite Aid, the overall retail environment remains challenging due to ongoing headline bankruptcies.
Higher Property Expenses
The company faced higher than expected property expenses in Q1, primarily driven by snow-related costs.
Company Guidance
During the Federal Realty Investment Trust's Q1 2025 earnings call, the company provided guidance with several key metrics. The trust reported a strong quarter with earnings per share of $1.70, exceeding consensus and internal expectations. They maintained a high leased occupancy rate of 95.9%, with a rental revenue increase of 6% year-over-year and property operating income up by almost 5%. The foot traffic at properties in the Washington DC MSA increased by 6%, Santana Row by 3%, and Boston by 11%. The trust executed 91 retail leases totaling 430,000 square feet and projected FFO per share for 2025 to be between $7.11 and $7.23, reflecting around 6% growth at the midpoint. They expect comparable property operating income growth of 3% to 4% for the year and anticipate occupancy to reach the mid-94% range by year-end. Furthermore, they highlighted a strong balance sheet with $1.5 billion in liquidity and a leverage ratio of 5.7 times, aiming to further reduce it to below 5.5 times. The company also authorized a $300 million share repurchase program, underscoring their strategic capital allocation priorities amidst market uncertainties.Federal Realty Financial Statement Overview
Summary
Federal Realty demonstrates solid financial health with consistent revenue and profit growth. The company maintains a balanced approach to leverage and demonstrates effective cash flow management, positioning it well for future opportunities in the retail REIT sector.Income Statement
Federal Realty shows a consistent upward trajectory with a healthy gross profit margin and net profit margin, reflecting strong operational efficiency. Revenue growth is stable, with a significant increase over the past few years. The EBIT and EBITDA margins are robust, indicating effective cost management.80
Positive
Balance Sheet
The balance sheet reflects moderate leverage with a steady debt-to-equity ratio. The return on equity is satisfactory, showing effective use of equity to generate income. The equity ratio is stable, indicating a balanced asset structure.72
Positive
Cash Flow
Cash flow analysis reveals a positive trend in free cash flow growth, driven by strong operating cash flow. The operating cash flow to net income ratio is favorable, illustrating efficient cash conversion from operations. The free cash flow to net income ratio suggests good cash generation relative to profits.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.22B | 1.20B | 1.13B | 1.07B | 951.22M | 835.49M | Gross Profit |
| 734.78M | 810.65M | 769.06M | 717.60M | 634.61M | 545.33M | EBIT |
| 428.01M | 472.36M | 406.47M | 368.79M | 306.83M | 289.52M | EBITDA |
| 824.67M | 814.95M | 736.79M | 828.82M | 674.70M | 544.55M | Net Income Common Stockholders |
| 302.24M | 295.21M | 236.99M | 254.74M | 132.56M | 3.48M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 109.22M | 123.41M | 250.82M | 85.56M | 162.13M | 798.33M | Total Assets |
| 8.62B | 8.52B | 8.44B | 8.23B | 7.62B | 7.61B | Total Debt |
| 4.60B | 4.56B | 4.69B | 4.47B | 4.19B | 4.44B | Net Debt |
| 4.49B | 4.44B | 4.44B | 4.39B | 4.03B | 3.64B | Total Liabilities |
| 5.18B | 5.10B | 5.21B | 5.02B | 4.75B | 4.92B | Stockholders Equity |
| 3.19B | 3.17B | 2.96B | 2.95B | 2.58B | 2.46B |
| Cash Flow | Free Cash Flow | ||||
| 371.09M | 327.80M | 244.71M | 100.07M | 30.84M | -132.01M | Operating Cash Flow |
| 613.13M | 574.56M | 555.83M | 516.77M | 471.35M | 369.93M | Investing Cash Flow |
| -562.34M | -446.83M | -358.32M | -786.00M | -660.12M | -368.38M | Financing Cash Flow |
| -32.91M | -252.30M | -33.85M | 190.41M | -452.97M | 661.74M |
Federal Realty Technical Analysis
Positive
96.64
Price Trends
94.28
Positive
98.30
Negative
104.27
Negative
Market Momentum
0.42
Negative
53.89
Neutral
67.18
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 96.64 is above the 20-day moving average (MA) of 95.73, above the 50-day MA of 94.28, and below the 200-day MA of 104.27, indicating a neutral trend. The MACD of 0.42 indicates Negative momentum. The RSI at 53.89 is Neutral, neither overbought nor oversold. The STOCH value of 67.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FRT.
Federal Realty Risk Analysis
Federal Realty disclosed 14 risk factors in its most recent earnings report. Federal Realty 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
Federal Realty 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 | $7.99B | 19.77 | 9.35% | 5.46% | 5.40% | -1.33% | |
78 Outperform | $14.20B | 27.44 | 5.19% | 4.76% | 12.55% | 45.10% | |
74 Outperform | $7.87B | 24.55 | 10.99% | 4.47% | 4.58% | 12.65% | |
73 Outperform | $8.44B | 28.09 | 9.85% | 4.56% | 6.07% | 24.23% | |
70 Outperform | $13.27B | 34.28 | 5.83% | 3.88% | 7.39% | 3.41% | |
69 Neutral | $8.20B | 42.03 | 3.54% | 4.12% | 13.75% | 5.67% | |
61 Neutral | $2.85B | 10.99 | 0.40% | 6.10% | 5.75% | -21.23% |
* Real Estate Sector Average
Performance Comparison
FRT
Federal Realty
96.64
-0.42
-0.43%
ADC
Agree Realty
74.80
16.03
27.28%
KIM
Kimco Realty
21.02
3.08
17.17%
NNN
National Retail Properties
42.55
2.65
6.64%
REG
Regency Centers
71.06
11.58
19.47%
BRX
Brixmor Property
25.77
4.43
20.76%
Federal Realty Corporate Events
Executive/Board ChangesShareholder Meetings
Federal Realty Amends CFO Severance Agreement
Neutral
May 9, 2025
On May 7, 2025, Federal Realty Investment Trust amended the severance agreement of its CFO, Daniel Guglielmone, to include a provision for a one-year salary and bonus if terminated without cause. Additionally, the company’s annual shareholder meeting on the same date saw the election of trustees and approval of executive compensation, alongside the ratification of Grant Thornton LLP as the independent auditor for 2025.
Stock Buyback
Federal Realty Announces $300M Share Buyback Program
Neutral
Apr 11, 2025
On April 10, 2025, Federal Realty Investment Trust announced a new common share repurchase program authorized by its Board of Trustees. The program allows the company to buy back up to $300 million of its common shares, with the timing and amount of repurchases depending on factors like market conditions and the company’s financial needs. This move could impact the company’s stock value and market positioning, offering flexibility in capital management.
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.