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Automotive Properties (TSE:APR.UN)
:APR.UN
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Automotive Properties
(TSX:APR.UN)
Rating:76Outperform
Price Target:
C$13.00
▲(12.07%Upside)
Positive Factors
Cash Flow Growth
Recent acquisitions in the US are expected to boost cash flow and enhance the company's growth potential.
Financial Flexibility
Pro-forma leverage is sitting comfortably below APR's 50-53% target range and allows for an additional ~$100M of net investment.
Geographic Expansion
Recently completed dispositions have expanded the REIT's geographic footprint into the U.S.
Negative Factors
Interest Expense
Greater interest expense from refinancing mortgages at higher interest rates.
Organic Growth
The organic growth profile is relatively modest.
Tenant Concentration
Tenant concentration remains an issue with 52% of base rent derived from the Dilawri Group.
Automotive Properties (APR.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$569.76M
Dividend Yield6.93%
Average Volume (3M)15.46K
Price to Earnings (P/E)9.7
Beta (1Y)0.47
Revenue Growth1.44%
EPS Growth7.01%
CountryCA
EmployeesN/A
SectorReal Estate
Sector Strength55
IndustryREIT - Specialty
Share Statistics
EPS (TTM)0.16
Shares Outstanding49,117,110
10 Day Avg. Volume17,018
30 Day Avg. Volume15,455
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)0.82
Price to Sales (P/S)0.00
P/FCF Ratio8.58
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$11.81Price Target Upside1.81% Upside
Rating ConsensusHold
Number of Analyst Covering4
Automotive Properties Business Overview & Revenue Model
Company DescriptionAutomotive Properties Real Estate Investment Trust (APR.UN) is a Canadian-based real estate investment trust focused on owning and acquiring income-producing automotive dealership properties located in Canada. The company's portfolio is diversified across several major automotive brands and geographic regions, providing stable rental income from long-term, triple-net leases with automotive dealership operators.
How the Company Makes MoneyAutomotive Properties makes money primarily through leasing its real estate properties to automotive dealership operators. The company generates revenue by collecting rental income from these properties, which are typically leased under long-term, triple-net agreements. These leases ensure that the tenants are responsible for the property's real estate taxes, building insurance, and maintenance costs, providing APR.UN with a steady and predictable cash flow. Additionally, the company may engage in strategic acquisitions to expand its portfolio, supported by favorable partnerships with major automotive groups, which can enhance its revenue generation capabilities.
Automotive Properties Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q3-2024)
| % Change Since: 10.48%|
Next Earnings Date:Aug 18, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strategic growth through acquisitions and an increase in AFFO, indicating positive operational performance. However, it was offset by a significant decline in net income and increased interest expenses, suggesting financial challenges.Q3-2024 Updates
Positive Updates
Property Rental Revenue Growth
Property rental revenue increased by 0.7% from Q3 a year ago, reflecting growth from property acquired in Q2 last year and contractual annual rent increases.
Successful Kennedy Lands Sale
Closed the sale of Kennedy Lands for $54 million, representing a 79% premium above IFRS value, demonstrating the ability to unlock urban land value.
Strategic Acquisitions
Entered agreements to acquire heavy construction equipment dealership properties in Greater Montreal and a Rivian-tenanted property in Tampa, marking entry into new markets and increasing portfolio diversification.
AFFO Increase
AFFO increased by 1.7% compared to Q3 a year ago, reflecting the impact of property acquisition and contractual rent increases.
Debt Management
Amended and extended a credit facility from January 2025 to January 2028, with increased capacity, maintaining a low debt to GBV ratio of 43.7%.
Negative Updates
Significant Net Income Decline
Net income decreased to $1.8 million from $28.3 million in Q3 a year ago, primarily due to noncash fair value adjustments.
Increased Interest Expense
Interest expense and other financing charges increased to $6.5 million, up by $0.2 million from Q3 a year ago, due to additional debt and higher interest rates.
FFO Decrease
FFO decreased by 0.4% compared to Q3 last year due to higher interest expense and reduction in straight-line rent adjustment.
Company Guidance
During the Q3 2024 earnings call for Automotive Properties REIT, the executives provided detailed guidance, highlighting several key metrics. Property rental revenue saw a 0.07% increase year-over-year, reaching $23.5 million, while cash NOI rose by 2.4% to $19.9 million. The REIT's AFFO per unit on a diluted basis increased by $0.233 from $0.23. Following the sale of Kennedy Lands for $54 million, representing a 79% premium above IFRS value and a capitalization rate of approximately 3.36%, the company plans to redeploy proceeds to drive AFFO growth per unit in 2025. The REIT also announced acquisitions in Montreal and Tampa for approximately CAD 25.4 million and USD 13.5 million, respectively, with expected closures by December 2024 and Q1 2025. Furthermore, the company maintains a strong financial position with an effective weighted average interest rate of 4.31% and a debt-to-GBV ratio of 43.7% as of September 30, 2024. Looking ahead, the REIT anticipates declaring a special distribution to unitholders due to increased taxable income from property sales and is poised for growth with a diverse portfolio and strategic acquisitions.Automotive Properties Financial Statement Overview
Summary
Automotive Properties demonstrates strong financial health with significant revenue growth and profitability. The balance sheet is stable with a healthy equity position and manageable debt levels, while cash flow generation is robust, indicating efficient cash conversion from profits. The absence of EBIT data is noted but does not overshadow the positive financial trajectory.Income Statement
Automotive Properties has shown remarkable revenue growth, with a year-over-year increase to $93.88M in 2024 from $92.48M in 2023. The gross profit margin remains strong at 84.5%. Despite a lack of EBIT figures for 2024, the EBITDA margin is impressive at 103.1%, indicating robust operational efficiency. However, the absence of EBIT data raises concerns about operating profit transparency. Net profit margin is high at 76.7%, signifying excellent profitability.76
Positive
Balance Sheet
The balance sheet of Automotive Properties reflects a healthy equity base with stockholders' equity at $663.40M, an increase from $539.99M in the previous year. The debt-to-equity ratio is manageable at 0.76, showcasing prudent leverage use. However, the equity ratio is 55.7%, indicating moderate risk exposure. ROE is notably strong at 10.9%, suggesting effective utilization of equity to generate profits.68
Positive
Cash Flow
Cash flow performance is robust, with a free cash flow of $75.91M and a significant operating cash flow to net income ratio of 1.05. This indicates strong cash generation capabilities relative to earnings. Moreover, the free cash flow to net income ratio remains equally strong at 1.05, reflecting efficient cash conversion from profits. The stability of cash flows is supported by consistent free cash flow growth.82
Very Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 93.88M | 92.48M | 82.86M | 78.22M | 75.12M |
| Gross Profit | 79.33M | 78.41M | 70.58M | 67.08M | 64.02M |
| EBITDA | 96.78M | 75.47M | 77.61M | 101.00M | 66.21M |
| Net Income | 72.00M | 50.99M | 119.67M | 122.38M | 4.82M |
Balance Sheet | |||||
| Total Assets | 1.19B | 1.19B | 1.09B | 1.05B | 936.35M |
| Cash, Cash Equivalents and Short-Term Investments | 336.00K | 298.00K | 396.00K | 474.00K | 308.00K |
| Total Debt | 502.24M | 535.08M | 434.89M | 420.58M | 403.02M |
| Total Liabilities | 527.33M | 653.91M | 572.87M | 591.28M | 545.10M |
| Stockholders Equity | 663.40M | 539.99M | 520.94M | 460.37M | 391.25M |
Cash Flow | |||||
| Free Cash Flow | 75.91M | 74.27M | 64.55M | 62.21M | 57.17M |
| Operating Cash Flow | 75.91M | 74.27M | 64.55M | 62.21M | 57.17M |
| Investing Cash Flow | 21.38M | -110.42M | -24.74M | -24.87M | -45.78M |
| Financing Cash Flow | -97.26M | 36.06M | -39.88M | -37.18M | -56.35M |
Automotive Properties Technical Analysis
Positive
11.60
Price Trends
10.73
Positive
10.36
Positive
10.71
Positive
Market Momentum
0.20
Negative
75.92
Negative
89.68
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:APR.UN, the sentiment is Positive. The current price of 11.6 is above the 20-day moving average (MA) of 11.21, above the 50-day MA of 10.73, and above the 200-day MA of 10.71, indicating a bullish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 75.92 is Negative, neither overbought nor oversold. The STOCH value of 89.68 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:APR.UN.
Automotive Properties 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 | $709.58M | 8.79 | 7.47% | 11.58% | 9.21% | -61.37% | |
76 Outperform | C$431.77M | 17.49 | 4.57% | 7.16% | 6.36% | 13.91% | |
76 Outperform | C$569.76M | 9.68 | 9.68% | 6.93% | 1.44% | 7.01% | |
75 Outperform | C$960.69M | 8.65 | 5.83% | 4.14% | 3.85% | -31.81% | |
71 Outperform | C$518.50M | 5.82 | 9.03% | 3.72% | -0.29% | ― | |
63 Neutral | $6.87B | 19.10 | -1.13% | 7.17% | 4.72% | -24.75% | |
57 Neutral | $742.56M | ― | -1.80% | 7.89% | -13.42% | 86.55% |
* Real Estate Sector Average
Performance Comparison
TSE:APR.UN
Automotive Properties
11.60
2.53
27.89%
TSE:AX.UN
Artis Real Estate Investment
7.60
1.65
27.65%
TSE:NXR.UN
Nexus Real Estate Investment
7.53
1.16
18.15%
TSE:PLZ.UN
Plaza Retail REIT
3.91
0.72
22.57%
TSE:MRG.UN
Morguard NA REIT UN
18.33
3.36
22.44%
TSE:MI.UN
Minto Apartment Real Estate Investment Trust
13.99
-0.58
-3.98%
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.