CT Real Estate Investment (CRT.UN) AI Stock Analysis

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TSE:CRT.UN Dividends

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CT Real Estate Investment

(TSX:CRT.UN)

79Outperform

CT Real Estate Investment Trust scores well due to its strong financial performance, robust growth metrics, and attractive valuation. However, concerns about increasing financing costs and expenses slightly temper the overall outlook.

Positive Factors

Operating Performance

CRT's operating performance was as expected, with Cash NOI increasing by 3.6% year over year, reflecting contractual rent increases and contributions from capital deployment.

Portfolio Expansion

Portfolio expansion included significant development and acquisitions, adding 322ksf to income properties, showcasing a strong investment strategy.

Negative Factors

Investor Base

CRT's ability to broaden its investor base is somewhat hindered by its single-tenant concentration.

CT Real Estate Investment (CRT.UN) vs. S&P 500 (SPY)

Market Cap

C$3.53B

Dividend Yield6.22%

Average Volume (3M)185.72K

Price to Earnings (P/E)8.0

Beta (1Y)0.75

Revenue Growth4.69%

EPS Growth88.66%

CountryCA

Employees71

SectorReal Estate

Sector Strength77

IndustryREIT - Retail

Share Statistics

EPS (TTM)1.84

Shares Outstanding109,158,775

10 Day Avg. Volume126,207

30 Day Avg. Volume185,722

Financial Highlights & Ratios

PEG Ratio0.09

Price to Book (P/B)N/A

Price to Sales (P/S)6.00

Price to Cash Flow (P/CF)8.00

P/FCF Ratio7.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$15.67

Price Target Upside5.88% Upside

Rating ConsensusHold

Number of Analyst Covering3

CT Real Estate Investment Business Overview & Revenue Model

Company DescriptionCT Real Estate Investment Trust (CRT.UN) is a real estate investment company focused on owning, managing, and developing a high-quality portfolio of retail properties across Canada. The company primarily leases these properties to Canadian Tire Corporation, its principal tenant, along with other retail tenants. CRT.UN operates in the real estate sector, with a core emphasis on retail properties that are strategically located to serve the needs of Canadian consumers.

How the Company Makes MoneyCT Real Estate Investment Trust generates revenue primarily through leasing its retail properties. The company earns rental income from long-term lease agreements with tenants, of which Canadian Tire Corporation is the most significant. This stable, long-term lease arrangement with a well-established tenant like Canadian Tire provides a steady and predictable income stream. Additionally, CRT.UN may increase its revenue through property developments and enhancements that can lead to higher rental rates or attract new tenants. The trust may also engage in strategic partnerships or joint ventures to expand its property portfolio, further contributing to its earnings.

CT Real Estate Investment Financial Statement Overview

Summary

CT Real Estate Investment demonstrates solid financial health with strong revenue and profit growth, a well-managed balance sheet with moderate leverage, and robust cash flow generation. There is a need to monitor leverage levels for long-term stability.

Income Statement

Positive

CT Real Estate Investment has shown a consistent revenue growth with a current year increase of 4.69% compared to the previous year. The gross profit margin is strong at 78.28%, reflecting efficient cost management. However, the net profit margin has seen significant improvement, reaching 75.05% due to a substantial increase in net income. The EBIT margin is not available for the current year, but the EBITDA margin is outstanding at 96.33%, indicating robust operational performance.

Balance Sheet

Positive

The company's balance sheet displays a moderately leveraged position with a debt-to-equity ratio of 0.89, which is manageable for a REIT. Return on Equity (ROE) is impressive at 23.77%, showing effective use of equity capital to generate profits. The equity ratio stands at 25.21%, suggesting a stable capital structure but indicating that there may be room to strengthen equity financing.

Cash Flow

Very Positive

Cash flow analysis reveals a healthy free cash flow growth rate of 1.60%. The operating cash flow to net income ratio is 1.00, indicating that operating activities are generating ample cash relative to net income. Additionally, the free cash flow to net income ratio is 0.92, which suggests efficient cash generation relative to profits. These metrics reflect a strong cash flow position supporting the company's operations and potential dividends.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
578.69M	552.77M	532.79M	514.54M	502.35M
	Gross Profit
453.00M	437.25M	421.66M	407.25M	391.58M
	EBIT
0.00	422.01M	379.34M	392.67M	378.71M
	EBITDA
557.48M	422.01M	435.29M	562.58M	378.71M
	Net Income Common Stockholders
434.22M	105.29M	324.61M	351.14M	75.26M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.06M	20.77M	2.61M	3.56M	4.53M
	Total Assets
7.25B	6.97B	6.84B	6.50B	6.18B
	Total Debt
1.63B	1.53B	1.44B	1.30B	1.27B
	Net Debt
1.63B	1.51B	1.44B	1.30B	1.26B
	Total Liabilities
3.15B	3.12B	3.02B	2.82B	2.80B
	Stockholders Equity
1.83B	1.71B	1.70B	1.62B	1.48B
Cash Flow		Free Cash Flow
399.62M	393.31M	369.13M	371.34M	353.21M
	Operating Cash Flow
436.04M	425.06M	399.27M	407.20M	370.77M
	Investing Cash Flow
-217.84M	-186.53M	-219.62M	-146.77M	-162.68M
	Financing Cash Flow
-235.91M	-220.37M	-180.60M	-261.41M	-213.29M

CT Real Estate Investment Technical Analysis

Technical Analysis Sentiment

Positive

Last Price14.80

Price Trends

50DMA

14.52

Positive

100DMA

14.38

Positive

200DMA

14.51

Positive

Market Momentum

MACD

0.08

Negative

RSI

57.58

Neutral

STOCH

78.85

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CRT.UN, the sentiment is Positive. The current price of 14.8 is above the 20-day moving average (MA) of 14.52, above the 50-day MA of 14.52, and above the 200-day MA of 14.51, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 57.58 is Neutral, neither overbought nor oversold. The STOCH value of 78.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CRT.UN.

CT Real Estate Investment Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRT.UN	79 Outperform	C$3.53B	8.04	11.30%	6.22%	4.69%	88.66%
SRU.UN	76 Outperform	C$4.33B	19.12	4.50%	7.28%	9.46%	-42.77%
CHP.UN	76 Outperform	$10.73B	19.64	11.80%	5.11%	0.70%	-18.29%
FCR.UN	72 Outperform	C$3.56B	17.38	5.20%	5.19%	6.55%	―
REI.UN	71 Outperform	$5.11B	10.91	6.34%	6.49%	11.62%	1120.60%
Sector *	59 Neutral	$2.72B	11.58	0.09%	8782.99%	5.32%	-16.79%
AP.UN	55 Neutral	$2.19B	―	-5.79%	11.53%	4.98%	19.54%

* Real Estate Sector Average

Performance Comparison

TSE:CRT.UN

CT Real Estate Investment

14.80

2.16

17.09%

TSE:REI.UN

RioCan Real Estate Investment

17.19

0.66

4.02%

TSE:CHP.UN

Choice Properties Real Estate Investment

14.82

2.47

19.95%

TSE:AP.UN

Allied Properties Real Estate Investment Trust

15.67

0.16

1.01%

TSE:FCR.UN

First Capital Realty

16.78

2.61

18.42%

TSE:SRU.UN

SmartCentres Real Estate Investment Trust

25.40

4.61

22.17%

CT Real Estate Investment Earnings Call Summary

Earnings Call Date:Feb 10, 2025

(Q4-2024)

% Change Since: 1.51%|

Next Earnings Date:May 05, 2025

Earnings Call Sentiment Positive

The earnings call reflected a strong performance by CT REIT, with significant growth in key operational metrics and a robust development pipeline. However, there are concerns about rising expenses and anticipated higher financing costs due to debt refinancing at increased interest rates.

Q4-2024 Updates

Positive Updates

Growth in Key Operating Metrics

CT REIT achieved a 3.6% increase in net operating income, 1.5% growth in same-store NOI, 2% growth in same-property NOI, and 1.7% growth in AFFO per unit for Q4 2024. For the full year, these metrics were up by 4.3%, 1.6%, 2.4%, and 3.0% respectively.

Successful Strategic Investments

CT REIT sourced and delivered nearly 500,000 square feet of new gross leaseable area in 2024, with a total investment of over $156 million.

Strong Development Pipeline

19 projects are in development, expected to add over 600,000 square feet in 2025, with a total committed investment of $328 million.

High Occupancy Rate

CT REIT maintained a 99.4% occupancy rate at the end of Q4, indicating a strong and stable portfolio.

Positive Leasing Activity

Extended over 400,000 square feet of non-Canadian Tire leases at a 10.3% spread over expiring rents.

Negative Updates

Increased G&A Expenses

G&A expenses as a percentage of property revenue increased from 2.6% to 2.9% in Q4 2024, driven by higher compensation expenses and timing of expenses.

Interest Coverage and Debt Refinancing Concerns

Interest coverage ratio decreased slightly from 3.60x to 3.52x due to higher interest costs. Anticipated refinancing of $452 million in debt at higher rates in 2025.

Higher Financing Costs

Expected increased net interest expense due to refinancing of maturing debts at higher interest rates.

Company Guidance

During CT REIT's Q4 2024 earnings call, the leadership team, including CEO Kevin Salsberg, highlighted several key metrics underscoring the REIT's financial performance and strategic investments. In Q4, CT REIT posted a 3.6% increase in net operating income (NOI), with same-store NOI rising by 1.5% and same-property NOI by 2%, while adjusted funds from operations (AFFO) per unit grew by 1.7%. For the full year, net operating income increased by 4.3%, same-store NOI by 1.6%, same-property NOI by 2.4%, and AFFO per unit by 3%. These metrics supported the REIT's 11th distribution increase since its IPO in 2013, resulting in a 42% total increase in distributions to unitholders. Despite a challenging investment climate, CT REIT secured nearly 500,000 square feet of new gross leasable area through its development and acquisition program with a total investment of over $156 million. The REIT maintained a robust balance sheet, with a 99.4% occupancy rate and a 7.7-year weighted average lease term, allowing it to pursue new opportunities while managing risks effectively. The REIT also repurchased over 875,000 units at an average cost of $13.50 per unit, demonstrating its commitment to enhancing unitholder value.

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.