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Federal Realty (FRT)
NYSE:FRT
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Federal Realty
(NYSE:FRT)
Rating:74Outperform
Price Target:
$106.00
▲(13.09% Upside)
Positive Factors
Acquisitions
CEO provided favorable commentary regarding additional larger type asset acquisitions on the horizon.
Earnings
The company reported strong financial performance with Funds From Operations per share of $1.70, which is above market expectations.
Guidance
Guidance was bumped above Street, driven by operations & acquisitions.
Negative Factors
Financial Performance
FFO/sh earnings in 2025 were below expectations.
Market Conditions
Near-term uncertainty in the Washington DC market is affecting FRT due to efforts to reduce federal government size and spending.
Valuation
Development not as lucrative, which drove FRT’s prior premium valuation.
Federal Realty (FRT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.06B
Dividend Yield4.69%
Average Volume (3M)797.18K
Price to Earnings (P/E)23.5
Beta (1Y)0.68
Revenue Growth6.00%
EPS Growth15.77%
CountryUS
Employees304
SectorReal Estate
Sector Strength48
IndustryREIT - Retail
Share Statistics
EPS (TTM)1.78
Shares Outstanding86,266,120
10 Day Avg. Volume1,116,753
30 Day Avg. Volume797,179
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.62
Enterprise Value/Revenue10.55
Enterprise Value/Gross Profit15.68
Enterprise Value/Ebitda14.76
Forecast
1Y Price Target
$108.54Price Target Upside15.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Federal Realty Business Overview & Revenue Model
Company DescriptionFederal Realty Investment Trust (FRT) is a publicly traded real estate investment trust (REIT) that specializes in the ownership, operation, and redevelopment of high-quality retail and mixed-use properties. Headquartered in Rockville, Maryland, FRT primarily focuses on urban and suburban markets in the United States, where it manages a diversified portfolio that includes shopping centers, retail spaces, and residential units. The company is known for its commitment to sustainability and community engagement, aiming to create vibrant, accessible spaces for consumers and businesses alike.
How the Company Makes MoneyFederal Realty generates revenue primarily through rental income from its properties, which includes both retail and residential tenants. The company leases space to a variety of tenants, including national and regional brands, restaurants, and service providers, ensuring a diversified income stream. Additionally, FRT benefits from long-term leases that provide stable cash flow, with many leases containing rent escalations that increase over time. The company also engages in property redevelopment and improvement projects, which can enhance asset value and increase rental income. Strategic partnerships with local communities and businesses further support its revenue generation by fostering tenant retention and attracting new customers to its properties.
Federal Realty Key Performance Indicators (KPIs)
Any
Gross Leasable Area Breakdown
Shows the distribution of leasable space across properties, indicating potential for rental income and the scale of operations in various locations.
Shows the distribution of leasable space across properties, indicating potential for rental income and the scale of operations in various locations.
Data provided by:
Main Street Data
Main Street DataFederal Realty Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: 0.59%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, robust leasing activity, and strategic acquisitions and dispositions, alongside challenges in development opportunities and occupancy levels in certain markets.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Reported FFO per share of $1.91, exceeding consensus and prior year FFO. Excluding tax credit impact, FFO of $1.76 per share exceeded guidance.
Near-Record Leasing Activity
Comparable retail leasing of 644,000 square feet was near an all-time quarterly record, with rent spreads at a solid 10% over in-place rents.
Positive Acquisition and Disposition Strategy
Acquisition of Town Center Plaza and Town Center Crossing in Kansas City, significant dispositions including Hollywood Boulevard retail portfolio for $69 million.
Dividend Increase
Declared an increase in quarterly common dividend by $0.03 per share, marking the 58th consecutive year of increases.
Expansion into New Markets
Exploration of new markets for acquisitions, such as Leawood, Kansas, driven by retailer demand and core competencies.
Negative Updates
Limited Growth in Development Opportunities
Opportunities are not as robust as they were in a lower interest rate environment, leading to a pivot to acquisitions.
Occupancy Challenges
Expected occupancy levels have been revised down to low 94% by year-end due to acquisition of Del Monte and slight delays in rent commencements.
Challenges in Washington, D.C. Market
Reports of local restaurant closures in Washington, D.C., with June traffic down despite overall resilience in the market.
Company Guidance
During the Federal Realty Investment Trust Second Quarter 2025 Earnings Conference Call, the company provided robust guidance for the fiscal year. Federal Realty reported a Funds from Operations (FFO) per share of $1.91 for the quarter, exceeding expectations, and subsequently raised its full-year guidance to a range of $7.16 to $7.26 per share. This increase is driven by a $0.02 operational outperformance and $0.02 accretion from recent acquisitions. The company highlighted a near-record leasing activity with 644,000 square feet leased, achieving rent spreads of 10% over in-place rents. Federal Realty also noted a comparable property-level operating income growth of approximately 5% and tightened its expected credit reserve range to 75 to 90 basis points. Additionally, it is proceeding with a strategic acquisition and disposition strategy that aligns with its core strengths, aiming for unlevered IRRs of around 9%. The company maintains a strong balance sheet, with $1.55 billion in liquidity and a net debt-to-EBITDA ratio of 5.4x. Federal Realty also announced a 3% increase in its quarterly dividend, marking the 58th consecutive annual increase, highlighting its status as a Dividend King.Federal Realty Financial Statement Overview
Summary
Federal Realty exhibits strong financial performance with consistent revenue growth and solid profitability margins. The balance sheet is stable, though the high leverage typical of the REIT industry poses some risk. Cash flow generation is robust, supporting the company's operational and investment activities effectively.Income Statement
Federal Realty shows a strong revenue growth trend with a 13.4% increase from 2023 to 2024 and a continued rise in TTM. Gross profit margins remain robust at approximately 60%, indicating efficient cost management. However, net profit margins are moderate at around 24.8% TTM, suggesting room for improvement in profitability. EBIT and EBITDA margins are healthy, reflecting solid operational performance.78
Positive
Balance Sheet
The company's balance sheet presents a stable equity ratio of about 37%, indicating a solid equity base. The debt-to-equity ratio is relatively high at approximately 1.44, which is typical for the REIT industry but suggests potential leverage risks. Return on equity is strong at 9.5% TTM, showcasing effective use of equity to generate profits.72
Positive
Cash Flow
Federal Realty demonstrates strong cash flow generation with a positive free cash flow growth rate of 13.2% TTM. The operating cash flow to net income ratio is robust at 2.03, indicating efficient cash generation from operations. The free cash flow to net income ratio is also healthy at 1.23, reflecting good cash conversion.75
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.24B | 1.20B | 1.13B | 1.07B | 951.22M | 835.49M |
| Gross Profit | 831.19M | 810.65M | 769.06M | 717.60M | 634.61M | 545.33M |
| EBITDA | 883.07M | 822.41M | 736.79M | 835.06M | 676.75M | 527.20M |
| Net Income | 346.17M | 295.21M | 236.99M | 385.49M | 261.50M | 131.71M |
Balance Sheet | ||||||
| Total Assets | 8.62B | 8.52B | 8.44B | 8.23B | 7.62B | 7.61B |
| Cash, Cash Equivalents and Short-Term Investments | 177.00M | 123.41M | 250.82M | 85.56M | 162.13M | 798.33M |
| Total Debt | 4.57B | 4.56B | 4.69B | 4.47B | 4.19B | 4.44B |
| Total Liabilities | 5.12B | 5.10B | 5.21B | 5.02B | 4.75B | 4.92B |
| Stockholders Equity | 3.25B | 3.17B | 2.96B | 2.95B | 2.58B | 2.46B |
Cash Flow | ||||||
| Free Cash Flow | 346.15M | 327.80M | 244.71M | 100.07M | 30.84M | -132.01M |
| Operating Cash Flow | 593.42M | 574.56M | 555.83M | 516.77M | 471.35M | 369.93M |
| Investing Cash Flow | -310.52M | -446.83M | -358.32M | -786.00M | -660.12M | -368.38M |
| Financing Cash Flow | -193.09M | -252.30M | -33.85M | 190.41M | -452.97M | 661.74M |
Federal Realty Technical Analysis
Positive
93.73
Price Trends
94.10
Negative
93.66
Positive
99.66
Negative
Market Momentum
-0.35
Negative
51.15
Neutral
75.66
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 93.73 is above the 20-day moving average (MA) of 93.42, below the 50-day MA of 94.10, and below the 200-day MA of 99.66, indicating a neutral trend. The MACD of -0.35 indicates Negative momentum. The RSI at 51.15 is Neutral, neither overbought nor oversold. The STOCH value of 75.66 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 (71)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $25.90B | 33.16 | 5.99% | 3.92% | 5.66% | 2.98% | |
77 Outperform | $14.31B | 25.49 | 5.63% | 4.68% | 10.46% | 56.11% | |
74 Outperform | $8.06B | 23.54 | 11.04% | 4.69% | 6.00% | 15.77% | |
73 Outperform | $7.99B | 43.04 | 3.44% | 4.22% | 13.27% | -5.92% | |
73 Outperform | $7.77B | 19.56 | 9.18% | 5.69% | 4.82% | -5.18% | |
73 Outperform | $8.07B | 24.14 | 11.52% | 4.30% | 5.98% | 12.11% | |
71 Outperform | ¥233.75B | 15.23 | 10.65% | 3.48% | 20.27% | 28.19% |
* Real Estate Sector Average
Performance Comparison
FRT
Federal Realty
93.73
-14.87
-13.69%
ADC
Agree Realty
72.16
3.65
5.33%
KIM
Kimco Realty
21.16
-0.17
-0.80%
NNN
National Retail Properties
41.14
-1.49
-3.50%
REG
Regency Centers
71.11
3.93
5.85%
BRX
Brixmor Property
26.38
1.54
6.20%
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.
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.