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Phillips Edison & Company, Inc. (PECO)
:PECO

Phillips Edison & Company (PECO) AI Stock Analysis

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Phillips Edison & Company

(NASDAQ:PECO)

Rating:70Outperform
Price Target:
$39.00
▲(13.54%Upside)
Phillips Edison & Company's strong earnings call with high occupancy and robust leasing spreads positively impacts the overall score. Financial performance shows solid operational efficiency, though profitability and leverage management need improvement. Technical analysis indicates bearish momentum, and valuation suggests caution due to a high P/E ratio. The combination of these factors results in an overall stock score of 70.
Positive Factors
Earnings Performance
Reported NAREIT FFO/sh exceeded consensus expectations.
Leasing Activity
Leasing demand remains strong with no signs of slowdown at the current time.
Negative Factors
Earnings Guidance
'25 earnings guidance was reiterated below the Street expectations.
Occupancy Challenges
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:Apr 24, 2025
(Q1-2025)
|
% Change Since: -1.91%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
The earnings call showcased strong operational performance with high occupancy and robust leasing spreads. Despite macroeconomic uncertainties and potential tariff impacts, PECO maintained a positive outlook with strong acquisition activity and affirmed full-year guidance. The presence of a significant one-time lease termination fee and concerns over increasing variable rate debt exposure were noted but did not overshadow the positive aspects.
Q1-2025 Updates
Positive Updates
Strong Same-Center NOI Growth
The PECO team delivered a strong quarter of growth with same-center NOI increasing by 3.9%.
High Occupancy and Leasing Performance
Portfolio occupancy remained high at 97.1%, with anchor occupancy at 98.4%. In-line renewal rent spreads reached a record high of 21.7%, and comparable new leasing rent spreads were 28.1%.
Robust Acquisition Activity
During the first quarter, PECO purchased $146 million in assets with a strong pipeline and affirmed acquisition guidance of $350 million to $450 million for 2025.
Full-Year Guidance Affirmed
PECO affirmed its 2025 guidance for Nareit FFO per share increase of 5.7% over 2024 at the mid-point and Core FFO per share increase of 5.1% at the mid-point.
Record In-Line Renewal Rent Spreads
The first quarter saw record high in-line renewal rent spreads of 21.7%, reflecting strong leasing and retention environment.
Negative Updates
Concerns Over Tariffs and Economic Uncertainty
There is uncertainty about the macroeconomic environment and potential impacts of tariffs, though no immediate signs of slowing demand.
Lease Termination Impact
First-quarter FFO benefited from a one-time lease termination fee, which was highlighted as non-recurring.
Increased Variable Rate Debt Exposure
PECO's variable rate debt exposure is expected to increase from 14% to about 25-26% later this year due to swap expirations.
Company Guidance
During the first quarter of 2025 earnings call for Phillips Edison & Company, the company provided several key metrics and affirmed its guidance for the year. The company reported a same-center net operating income (NOI) growth of 3.9% and maintained high portfolio occupancy at 97.1%, with anchor occupancy at 98.4%. Lease renewal rent spreads reached a record high of 21.7%, while new leasing rent spreads were 28.1%. Phillips Edison confirmed its guidance for 2025, projecting a Nareit FFO per share increase of 5.7% over 2024 at the mid-point and a Core FFO per share increase of 5.1% at the mid-point. The company aims for a 3% to 3.5% same-center NOI growth for the year. Additionally, they expect to acquire $350 million to $450 million in assets, targeting an unlevered internal rate of return (IRR) of 9%. The company emphasized its focus on grocery-anchored centers, with 71% of its annual base rent (ABR) derived from necessity-based goods and services, providing insulation against potential tariff disruptions.

Phillips Edison & Company Financial Statement Overview

Summary
Phillips Edison & Company exhibits strong revenue growth and operational efficiency, with high gross and EBITDA margins. The balance sheet is stable but shows moderate leverage and modest returns on equity. Cash flow management is excellent, with high cash flow to net income ratios, although recent free cash flow growth has declined. The focus should be on enhancing profitability and managing leverage.
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue678.99M661.39M610.12M575.37M532.85M498.02M
Gross Profit421.87M471.07M435.00M412.15M374.55M343.51M
EBITDA434.50M425.46M390.64M354.75M315.04M315.44M
Net Income71.32M62.69M56.85M48.32M15.12M4.77M
Balance Sheet
Total Assets4.89B6.55B4.87B4.74B4.67B4.68B
Cash, Cash Equivalents and Short-Term Investments10.10M12.30M4.87M5.48M92.58M104.30M
Total Debt2.13B2.23B2.08B1.90B2.00B2.39B
Total Liabilities2.25B2.41B2.21B2.14B2.19B2.66B
Stockholders Equity2.30B2.32B2.31B2.24B2.15B1.69B
Cash Flow
Free Cash Flow224.12M239.63M195.71M186.40M187.87M146.61M
Operating Cash Flow332.63M334.71M290.97M290.89M262.90M210.58M
Investing Cash Flow-490.38M-392.94M-353.39M-331.25M-180.49M-44.09M
Financing Cash Flow155.50M58.01M53.95M-57.83M-98.82M-129.66M

Phillips Edison & Company Technical Analysis

Technical Analysis Sentiment
Negative
Last Price34.35
Price Trends
50DMA
35.21
Negative
100DMA
35.27
Negative
200DMA
36.08
Negative
Market Momentum
MACD
-0.16
Positive
RSI
43.30
Neutral
STOCH
17.28
Positive
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 34.35 is below the 20-day moving average (MA) of 35.20, below the 50-day MA of 35.21, and below the 200-day MA of 36.08, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 43.30 is Neutral, neither overbought nor oversold. The STOCH value of 17.28 is Positive, 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$2.69B25.057.62%5.30%6.20%0.28%
SKSKT
73
Outperform
$3.54B37.0115.89%3.72%12.38%-6.36%
BRBRX
71
Outperform
$7.81B24.3510.99%4.51%4.58%12.65%
70
Outperform
$4.75B61.413.09%3.58%9.27%19.51%
KRKRG
69
Neutral
$4.98B367.690.81%4.81%4.37%-75.82%
MAMAC
66
Neutral
$4.25B-4.79%4.20%9.58%-3.85%
63
Neutral
$6.92B18.42-1.93%6.88%4.65%-25.39%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PECO
Phillips Edison & Company
34.57
3.26
10.41%
MAC
Macerich
16.33
1.71
11.70%
SKT
Tanger
31.59
5.61
21.59%
KRG
Kite Realty Group
22.22
1.07
5.06%
BRX
Brixmor Property
25.53
3.72
17.06%
FCPT
Four Corners Property
26.60
2.64
11.02%

Phillips Edison & Company Corporate Events

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.

Business Operations and StrategyFinancial Disclosures
Phillips Edison Reports Strong Q1 2025 Financial Results
Positive
Apr 24, 2025

On April 24, 2025, Phillips Edison & Company reported its financial results for the first quarter of 2025, showing strong performance with a net income of $26.3 million and significant growth in funds from operations. The company affirmed its full-year earnings guidance, highlighting a 3.9% increase in same-center net operating income and strong leasing activity. The company acquired six shopping centers and extended its revolving credit facility, positioning itself for continued growth and stability in the grocery-anchored retail sector.

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: Jun 26, 2025