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Crombie Real Estate ate (TSE:CRR.UN)
TSX:CRR.UN
Canadian Market

Crombie Real Estate ate (CRR.UN) AI Stock Analysis

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Crombie Real Estate ate

(TSX:CRR.UN)

72Outperform
Crombie Real Estate Investment Trust demonstrates strong financial performance with impressive revenue and profit growth, robust cash flow, and effective strategic initiatives. While technical indicators suggest some caution due to short-term bearish trends, the company’s strategic focus and healthy earnings call performance add confidence. Valuation concerns due to a negative P/E ratio are tempered by a strong dividend yield, maintaining a balanced outlook.
Positive Factors
Competitive Position
Crombie currently trades at an implied cap rate of 7.2%, or a 5.3% discount to the NAV estimate, which is favorable compared to its Canadian retail peers.
Credit Rating
The balance sheet is in great shape and efforts to improve the REIT's financial profile could soon be rewarded with a one-notch credit rating upgrade.
Financial Performance
Funds from operations per unit increased by 6.7% in the recent quarter, driven by better-than-expected leasing activity.
Negative Factors
G&A Costs
G&A costs rose 25% due to greater unit-based compensation expense as the unit price has risen 14.5% over the past year.
Interest Expense
Interest expense increased as Crombie REIT refinanced maturing debt at higher interest rates.
Operating Income
Within the office portfolio, same-property net operating income dropped 8.2% in the recent quarter as occupancy decreased.

Crombie Real Estate ate (CRR.UN) vs. S&P 500 (SPY)

Crombie Real Estate ate Business Overview & Revenue Model

Company DescriptionCrombie Real Estate Investment Trust ("Crombie") is an unincorporated, open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario. Crombie is one of the country's leading national retail property landlords with a strategy to own, operate and develop a portfolio of high-quality grocery- and pharmacy-anchored shopping centres, freestanding stores and mixed-use developments primarily in Canada's top urban and suburban markets.
How the Company Makes MoneyCrombie Real Estate Investment Trust makes money primarily through rental income generated from its portfolio of retail and commercial properties. The company leases space to a variety of tenants, with a significant portion of its revenue coming from long-term leases with grocery chains and other retailers. Crombie's revenue model is supported by strategic partnerships with major Canadian retail brands, which provide steady and predictable cash flow. In addition to rental income, Crombie may also generate revenue through property development and redevelopment activities, enhancing the value of its assets and creating opportunities for increased rental income. The trust strategically manages its portfolio to maximize occupancy rates and rental yields, while focusing on properties that offer growth potential and resilience against market fluctuations.

Crombie Real Estate ate Financial Statement Overview

Summary
Crombie Real Estate's financial performance in 2024 is impressive, with strong revenue and profit growth, efficient cash flow management, and a stable balance sheet. The company benefits from robust margins and cash generation, although high leverage remains a concern typical for its industry. Overall, the financial health is strong, positioning the company well for future opportunities.
Income Statement
75
Positive
The company exhibits strong revenue growth with a 7.2% increase from 2023 to 2024. The gross profit margin remains healthy at approximately 64.4% for 2024. Net profit margin improved significantly from 22.2% in 2023 to 33.2% in 2024, indicating enhanced profitability. The EBITDA margin is robust at 69.9%, reflecting efficient operations. However, the absence of EBIT margin data for 2024 suggests some operational challenges.
Balance Sheet
70
Positive
Crombie Real Estate demonstrates a stable financial position with a debt-to-equity ratio of 1.3 in 2024, showing a moderate level of leverage typical for REITs. The equity ratio is 41.9%, indicating a solid equity base. Return on equity improved from 5.4% in 2023 to 8.5% in 2024, showcasing better shareholder returns. The balance sheet stability is strong, but high liabilities relative to assets pose potential risks.
Cash Flow
80
Positive
The company shows excellent cash flow management with a substantial increase in free cash flow from 2023 to 2024, growing by 10.2%. The operating cash flow to net income ratio is 1.7, reflecting strong cash generation capability. Free cash flow to net income ratio is 1.7, indicating efficient capital expenditure management. These metrics highlight significant positive cash flow performance.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
476.36M444.37M419.59M408.89M388.73M
Gross Profit
307.02M290.84M281.82M283.03M258.86M
EBIT
0.00184.36M180.98M194.92M163.07M
EBITDA
332.85M264.47M260.81M270.68M238.64M
Net Income Common Stockholders
158.26M98.82M167.80M155.40M67.61M
Balance SheetCash, Cash Equivalents and Short-Term Investments
10.02M2.22M6.12M3.92M63.29M
Total Assets
4.43B4.15B4.08B4.02B4.11B
Total Debt
2.42B2.19B2.08B2.25B2.48B
Net Debt
2.41B2.19B2.07B2.25B2.42B
Total Liabilities
2.57B2.32B2.23B2.43B2.63B
Stockholders Equity
1.86B1.82B1.85B1.60B1.48B
Cash FlowFree Cash Flow
264.12M239.71M233.29M224.65M-75.30M
Operating Cash Flow
264.96M239.91M233.54M224.84M-73.90M
Investing Cash Flow
-100.73M-143.89M-47.28M18.49M-124.28M
Financing Cash Flow
-154.22M-102.14M-185.29M-302.71M261.47M

Crombie Real Estate ate Technical Analysis

Technical Analysis Sentiment
Positive
Last Price14.97
Price Trends
50DMA
14.14
Positive
100DMA
13.71
Positive
200DMA
13.94
Positive
Market Momentum
MACD
0.20
Negative
RSI
66.26
Neutral
STOCH
74.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CRR.UN, the sentiment is Positive. The current price of 14.97 is above the 20-day moving average (MA) of 14.28, above the 50-day MA of 14.14, and above the 200-day MA of 13.94, indicating a bullish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 66.26 is Neutral, neither overbought nor oversold. The STOCH value of 74.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CRR.UN.

Crombie Real Estate ate Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
C$411.89M16.614.61%7.51%5.99%20.38%
76
Outperform
C$4.34B19.174.50%7.25%9.46%-42.77%
72
Outperform
C$2.76B-0.22%6.01%8.82%92.79%
60
Neutral
$2.78B11.390.16%8531.54%5.92%-14.67%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CRR.UN
Crombie Real Estate ate
14.97
2.93
24.34%
RIOCF
RioCan Real Estate Investment
12.50
0.15
1.21%
TSE:PLZ.UN
Plaza Retail REIT
3.74
0.50
15.43%
TSE:SRU.UN
SmartCentres Real Estate Investment Trust
25.47
4.20
19.75%
ARESF
Artis Real Estate Investment
5.34
1.01
23.33%
CDNAF
Canadian Tire
109.48
14.50
15.27%

Crombie Real Estate ate Earnings Call Summary

Earnings Call Date:Feb 19, 2025
(Q4-2024)
|
% Change Since: 7.93%|
Next Earnings Date:May 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Crombie's robust performance across various metrics, successful acquisitions, and strategic asset management. Despite some challenges with non-core assets and higher interest expenses, the overall sentiment is positive due to strong growth in AFFO, effective portfolio optimization, and a solid financial position.
Q4-2024 Updates
Positive Updates
Strong Operating Performance
Crombie delivered exceptional performance in 2024 with committed occupancy of 96.8%, same-asset property cash NOI growth of 2.9%, and an average annual minimum rent per square foot growth of 3.9%.
Significant AFFO Growth
AFFO per unit increased by 6.9% from 2023, with a payout ratio now at 82.4%. The AFFO and FFO payout ratios in the fourth quarter were among the lowest in Crombie's history, at 79.7% and 70.3% respectively.
Successful Portfolio Optimization
Crombie added 225,000 square feet of new leases and achieved renewal spreads of 9.8%. The company sold non-core assets with structural vacancies, increasing occupancy by approximately 30 basis points.
Strategic Acquisitions
Crombie completed acquisitions including a 48,000 square foot FreshCo site, a 14,000 square foot IGA store, and the remaining 50% of Zephyr, a mixed-use asset in Vancouver.
Strong Financial Position
Crombie ended 2024 with available liquidity of $682 million and an unencumbered asset pool increased by 40% to $3.7 billion. The company issued $300 million of senior unsecured notes at an interest rate of 4.73%.
Negative Updates
Higher Interest Expense
Despite the overall strong financial performance, higher interest expenses partially offset the growth in property revenue from robust leasing activity and acquisitions.
Challenges with Non-Core Assets
Crombie disposed of non-core assets that exhibited structural vacancies and higher-than-average maintenance CapEx, indicating challenges in optimizing these assets.
Company Guidance
During Crombie REIT's Fourth Quarter Conference Call for fiscal year 2024, a comprehensive update on the company's performance and strategy was provided. Crombie achieved a committed occupancy rate of 96.8%, same-asset property cash NOI growth of 2.9%, and an average annual minimum rent per square foot growth of 3.9%. The company added 225,000 square feet of new leases and renewal spreads of 9.8%, resulting in an AFFO per unit of $1.08, a 6.9% increase from 2023, with an AFFO payout ratio of 82.4%. The debt-to-EBITDA ratio ended at 7.96 times. For capital allocation, Crombie spent approximately $121 million, with 50% allocated to nonmajor initiatives, 35% to major developments, and 15% on grocery-anchored acquisitions. The anticipated yield on cost for their current nonmajor development project pool is between 6.9% and 8%. Crombie's financial strength is also highlighted by a debt-to-gross fair value of 43.6% and available liquidity of $682 million. The strategic focus on necessity-based, grocery-anchored retail properties, supported by a strong partnership with Empire, positions Crombie to navigate economic shifts confidently.

Crombie Real Estate ate Corporate Events

Dividends
Crombie REIT Announces April 2025 Distribution
Positive
Apr 16, 2025

Crombie Real Estate Investment Trust announced a distribution of $0.07417 per unit for April 2025, payable on May 15, 2025, to unitholders of record as of April 30, 2025. This announcement reflects Crombie’s ongoing commitment to providing value to its investors and maintaining its position as a leading real estate investment trust in Canada, with a focus on enriching communities through strategic real estate investments.

Spark’s Take on TSE:CRR.UN Stock

According to Spark, TipRanks’ AI Analyst, TSE:CRR.UN is a Outperform.

Crombie REIT demonstrates strong financial performance with impressive revenue and profit growth, robust cash flow, and effective strategic initiatives. While technical indicators suggest some caution due to short-term bearish trends, the company’s strategic focus and healthy earnings call performance add confidence. Valuation concerns due to a negative P/E ratio are tempered by a strong dividend yield, maintaining a balanced outlook.

To see Spark’s full report on TSE:CRR.UN stock, click here.

Business Operations and Strategy
Crombie REIT Forms Strategic Joint Ventures to Boost Halifax Developments
Positive
Apr 11, 2025

Crombie Real Estate Investment Trust has entered into joint venture partnerships with Montez Corporation to enhance value creation in Halifax, Nova Scotia. These partnerships involve Montez acquiring a 50% interest in The Marlstone project and collaborating on Barrington Street and Brunswick Place developments. This strategic move provides Crombie with immediate cash flow through management fees, enhances its balance sheet flexibility, and allows continued investment in its core retail portfolio, thus supporting long-term growth and value for unitholders.

Spark’s Take on TSE:CRR.UN Stock

According to Spark, TipRanks’ AI Analyst, TSE:CRR.UN is a Neutral.

Crombie REIT demonstrates strong financial performance with impressive revenue and profit growth, robust cash flow, and effective strategic initiatives. Although the high leverage typical of REITs poses a risk, the company’s solid earnings call performance and strategic focus add confidence. However, valuation concerns due to a negative P/E ratio slightly temper the overall positive outlook.

To see Spark’s full report on TSE:CRR.UN stock, click here.

Shareholder MeetingsFinancial Disclosures
Crombie REIT Announces AGM and Q1 2025 Conference Call
Neutral
Apr 4, 2025

Crombie Real Estate Investment Trust has announced its Fiscal 2024 Annual General Meeting (AGM) and Q1 Fiscal 2025 Conference Call, both scheduled for May 8, 2025. The AGM will be held in New Glasgow, Nova Scotia, and will be accessible via live audio webcast, while the conference call will discuss Crombie’s financial and operational results for the first quarter of 2025. This announcement highlights Crombie’s commitment to transparency and engagement with its stakeholders, providing insights into its financial health and strategic direction.

Dividends
Crombie REIT Announces March 2025 Distribution
Positive
Mar 17, 2025

Crombie Real Estate Investment Trust announced a monthly distribution of $0.07417 per unit for March 2025, payable on April 15, 2025, to unitholders of record as of March 31, 2025. This announcement reflects Crombie’s ongoing commitment to delivering value to its stakeholders and maintaining its position as a leading real estate investment trust in Canada, with a focus on enriching communities through strategic investments.

Private Placements and FinancingM&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Crombie REIT Reports Robust Year-End 2024 Results, Boosts Financial Flexibility
Positive
Feb 19, 2025

Crombie Real Estate Investment Trust reported strong financial performance for the fourth quarter and year-end 2024, with significant growth in occupancy levels, same-asset property cash NOI, and AFFO per unit. The company strategically acquired assets, including the remaining 50% of Zephyr residential in Vancouver, and completed significant financial transactions such as issuing $300 million in senior unsecured notes. These actions enhance Crombie’s financial flexibility and position it for sustained growth, benefiting stakeholders and reinforcing its market standing.

Dividends
Crombie REIT Announces February 2025 Distribution
Positive
Feb 14, 2025

Crombie Real Estate Investment Trust announced its monthly distribution of $0.07417 per unit for February 2025, payable to unitholders on March 14, 2025. This distribution reflects Crombie’s ongoing commitment to providing value to its stakeholders, leveraging its robust portfolio and development pipeline to sustain its position in the real estate industry.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.