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Phillips Edison & Company, Inc. (PECO)
:PECO
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Phillips Edison & Company (PECO) AI Stock Analysis

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PECO

Phillips Edison & Company

(NASDAQ:PECO)

Rating:70Neutral
Price Target:
$38.00
▲(10.40%Upside)
The overall score reflects strong financial performance and positive earnings guidance, which are somewhat offset by technical weaknesses and overvaluation concerns. The positive sentiment from the earnings call and robust cash flow management are significant strengths.
Positive Factors
Acquisitions
PECO acquired 6 shopping centers for $133mn in 2Q at a weighted average cap rate of 7.1%.
Earnings
Core earnings beat with solid SSNOI, indicating strong performance.
Negative Factors
Earnings Guidance
'25 earnings guidance was reiterated below the Street expectations.
Occupancy
Leased occupancy declined -60bps Q/Q to 97.1% due to known bankruptcies.

Phillips Edison & Company (PECO) vs. SPDR S&P 500 ETF (SPY)

Phillips Edison & Company Business Overview & Revenue Model

Company DescriptionPhillips Edison & Company, Inc. (PECO), an internally-managed REIT, is one of the nation's largest owners and operators of grocery-anchored shopping centers. PECO's diversified portfolio of well-occupied neighborhood shopping centers features a mix of national and regional retailers selling necessity-based goods and services in fundamentally strong markets throughout the United States. Through its vertically-integrated operating platform, the Company manages a portfolio of 309 properties, including 283 wholly-owned properties comprising approximately 31.7 million square feet across 31 states (as of September 30, 2020). PECO has generated strong operating results over its 29+ year history and has partnered with leading institutional commercial real estate investors, including TPG Real Estate and The Northwestern Mutual Life Insurance Company. The Company remains exclusively focused on creating great grocery-anchored shopping experiences and improving the communities it serves one center at a time.
How the Company Makes MoneyPhillips Edison & Company generates revenue primarily through the leasing of retail space in their grocery-anchored shopping centers. The company's primary revenue streams include rental income from tenants, which often consist of long-term leases with built-in rent escalations, and additional income from common area maintenance fees and other property-related services. PECO aims to maintain high occupancy rates and attract a diverse mix of national, regional, and local tenants to ensure stable and reliable cash flows. The company's earnings are also supported by its strategic acquisitions and dispositions of properties, which help optimize its portfolio. Partnerships with grocery chains and other retail entities enhance the value of their properties, contributing to increased foot traffic and tenant demand.

Phillips Edison & Company Earnings Call Summary

Earnings Call Date:Jul 24, 2025
(Q2-2025)
|
% Change Since: -0.98%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook for the company, with strong financial performance and increased guidance for 2025. Despite challenges like tariffs and increased bad debt, the company has maintained high occupancy rates and significant leasing spreads, demonstrating resilience and growth potential.
Q2-2025 Updates
Positive Updates
Strong FFO and NOI Growth
Core FFO per share increased by 8.5% and same-center NOI grew by 4.2% compared to the previous period.
High Occupancy Rates
Portfolio occupancy remained high at 97.4% with anchor occupancy at 98.9% and in-line occupancy increased to 94.8%.
Significant Leasing Spreads
Comparable new leasing rent spreads for the second quarter were 34.6%, and in-line new rent spreads were 28.1%.
Increased 2025 Guidance
The guidance for 2025 same-center NOI growth was updated to 3.1% to 3.6%, and for NAREIT FFO per share and core FFO per share to a 6.3% and 6% increase over 2024, respectively.
Robust Acquisition Activity
Year-to-date gross acquisitions reached $287 million, with a strong pipeline indicating confidence in achieving the full year acquisition guidance of $350 million to $450 million.
Successful Bond Offering
Completed a $350 million bond offering of 5.25% senior notes due 2032, which replenished liquidity and supported acquisition funding.
Negative Updates
Concerns Over Tariffs
There is ongoing concern about the impact of tariffs on PECO’s portfolio, though the exposure is estimated to be limited to around 15% of the portfolio.
Increased Bad Debt
Bad debt in the quarter was up from a year ago, though it remained within the guidance range.
Slight Slowdown in Second Half Growth
Expected deceleration in same-store NOI growth in the second half due to timing of expenses and previous high growth.
Company Guidance
During Phillips Edison & Company's Second Quarter 2025 earnings call, the company reported a 4.2% increase in same-center Net Operating Income (NOI) and an 8.5% rise in Core Funds from Operations (FFO) per share. The company raised its full-year 2025 earnings guidance for same-center NOI, core FFO per share, and NAREIT FFO per share due to strong business performance. PECO highlighted its strategy of focusing on grocery-anchored centers, achieving high occupancy rates (97.4% overall, with anchor occupancy at 98.9%), and maintaining strong leasing spreads, with comparable renewal rent spreads at 19.1% and new leasing rent spreads at 34.6%. The company also noted a robust acquisition strategy, having purchased $287 million in assets year-to-date, with a full-year gross acquisition guidance of $350 million to $450 million. Despite market volatility, PECO remains confident in its growth trajectory, supported by $972 million in liquidity and a solid balance sheet with a net debt to trailing 12-month annualized adjusted EBITDAre of 5.4x.

Phillips Edison & Company Financial Statement Overview

Summary
Phillips Edison & Company exhibits strong revenue growth and operational efficiency, with high gross and EBITDA margins. Although the balance sheet shows moderate leverage and modest returns on equity, cash flow management is excellent with high cash flow to net income ratios. However, the decline in free cash flow growth and low net profit margin suggest areas for improvement.
Income Statement
78
Positive
Phillips Edison & Company shows a consistent upward trend in revenue, with a notable revenue growth rate of 11.28% from 2023 to 2024 and 2.66% in TTM 2025. Gross profit margin remains strong at around 62.14% in TTM 2025. However, net profit margin is low, standing at 6.25% in TTM 2025, indicating relatively high operational costs. The EBIT margin of 26.11% and EBITDA margin of 63.98% in TTM 2025 highlight solid operational efficiency.
Balance Sheet
65
Positive
The company maintains a stable balance sheet with an equity ratio of 34.61% in TTM 2025, indicating a sound capital structure. The debt-to-equity ratio is 1.04, reflecting moderate leverage. Return on equity is modest at 1.84% in TTM 2025, suggesting room for improvement in generating returns on equity.
Cash Flow
82
Very Positive
Phillips Edison & Company demonstrates robust cash flow management with a high operating cash flow to net income ratio of 7.84 in TTM 2025, indicating strong cash generation relative to net income. Free cash flow to net income ratio is also favorable at 5.28, showing efficient cash utilization. The free cash flow growth rate, however, is negative at -6.49% from 2024 to TTM 2025, pointing to potential pressures on free cash flow.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue661.39M610.12M575.37M532.85M498.02M
Gross Profit471.07M435.00M412.15M374.55M343.51M
EBITDA425.46M390.64M354.75M315.04M315.44M
Net Income62.69M56.85M48.32M15.12M4.77M
Balance Sheet
Total Assets5.05B4.87B4.74B4.67B4.68B
Cash, Cash Equivalents and Short-Term Investments4.88M4.87M5.48M92.58M104.30M
Total Debt2.23B2.08B1.90B2.00B2.39B
Total Liabilities2.41B2.21B2.14B2.19B2.66B
Stockholders Equity2.32B2.31B2.24B2.15B1.69B
Cash Flow
Free Cash Flow239.63M195.71M186.40M187.87M146.61M
Operating Cash Flow334.71M290.97M290.89M262.90M210.58M
Investing Cash Flow-392.94M-353.39M-331.25M-180.49M-44.09M
Financing Cash Flow58.01M53.95M-57.83M-98.82M-129.66M

Phillips Edison & Company Technical Analysis

Technical Analysis Sentiment
Negative
Last Price34.42
Price Trends
50DMA
34.91
Negative
100DMA
34.99
Negative
200DMA
35.85
Negative
Market Momentum
MACD
-0.16
Positive
RSI
40.19
Neutral
STOCH
34.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PECO, the sentiment is Negative. The current price of 34.42 is below the 20-day moving average (MA) of 34.62, below the 50-day MA of 34.91, and below the 200-day MA of 35.85, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 40.19 is Neutral, neither overbought nor oversold. The STOCH value of 34.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PECO.

Phillips Edison & Company Risk Analysis

Phillips Edison & Company disclosed 55 risk factors in its most recent earnings report. Phillips Edison & Company 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

Phillips Edison & Company Peers Comparison

Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$8.07B24.1111.52%4.34%5.98%12.11%
72
Outperform
$2.66B24.607.73%5.49%6.28%1.21%
71
Outperform
$5.07B374.685.53%4.66%3.81%
70
Neutral
$4.68B64.133.01%3.63%10.31%14.39%
68
Neutral
$3.52B36.7615.89%3.75%12.38%-6.36%
61
Neutral
$4.40B-4.79%4.11%9.58%-3.85%
54
Neutral
$1.21B3.680.67%6.23%-2.50%-129.28%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PECO
Phillips Edison & Company
33.79
-0.31
-0.91%
MAC
Macerich
16.71
1.81
12.15%
SKT
Tanger
30.02
2.28
8.22%
KRG
Kite Realty Group
21.98
-1.65
-6.98%
BRX
Brixmor Property
26.13
1.64
6.70%
FCPT
Four Corners Property
25.24
-0.68
-2.62%

Phillips Edison & Company Corporate Events

Regulatory Filings and Compliance
Phillips Edison Updates REIT Tax Considerations
Neutral
Jul 28, 2025

On February 7, 2025, Phillips Edison & Company, Inc. filed a Registration Statement with the SEC, updating its U.S. federal income tax considerations for its REIT status. The filing emphasizes the complexities and potential changes in tax laws affecting REIT qualifications and the implications for stakeholders, including the possibility of retroactive changes impacting tax treatment.

The most recent analyst rating on (PECO) stock is a Hold with a $38.00 price target. To see the full list of analyst forecasts on Phillips Edison & Company stock, see the PECO Stock Forecast page.

Private Placements and FinancingM&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Phillips Edison Reports Strong Q2 2025 Financial Results
Positive
Jul 24, 2025

On July 24, 2025, Phillips Edison & Company reported its second-quarter 2025 financial results, highlighting a net income of $12.8 million and increased full-year earnings guidance. The company achieved a 4.2% growth in same-center NOI and reported strong occupancy rates, reflecting robust retailer demand and effective operational strategies. The company also completed significant acquisitions and a public debt offering, positioning itself for continued growth despite macroeconomic uncertainties.

The most recent analyst rating on (PECO) stock is a Hold with a $37.00 price target. To see the full list of analyst forecasts on Phillips Edison & Company stock, see the PECO Stock Forecast page.

Private Placements and Financing
Phillips Edison & Company Completes $350 Million Senior Notes Offering
Neutral
Jun 17, 2025

On June 17, 2025, Phillips Edison Grocery Center Operating Partnership I, L.P., a subsidiary of Phillips Edison & Company, completed a public offering of $350 million in senior notes due 2032, guaranteed by the parent company and its subsidiaries. The proceeds, estimated at $346.2 million after expenses, will be used for general corporate purposes, including debt repayment and property acquisitions, potentially impacting the company’s financial flexibility and market positioning.

The most recent analyst rating on (PECO) stock is a Hold with a $37.00 price target. To see the full list of analyst forecasts on Phillips Edison & Company stock, see the PECO Stock Forecast page.

Shareholder MeetingsDividends
Phillips Edison & Company Holds Annual Stockholders Meeting
Positive
May 1, 2025

On May 1, 2025, Phillips Edison & Company held its annual meeting of stockholders, where all ten directors were re-elected, executive compensation was approved, and Deloitte & Touche LLP was ratified as the independent auditor for 2025. Additionally, the company declared monthly dividend distributions of $0.1025 per share for May, June, and July 2025, reflecting its commitment to returning value to shareholders.

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 31, 2025