First Capital Realty (FCR.UN) AI Stock Analysis

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TSE:FCR.UN Dividends

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First Capital Realty

(TSX:FCR.UN)

72Outperform

First Capital Realty exhibits solid operational efficiency and cash flow management, supported by strategic initiatives that enhance growth in OFFO. The fair valuation and attractive dividend yield add to its appeal. However, challenges with revenue growth, net income stability, and debt levels present risks, tempering the overall score.

Positive Factors

Financial Performance

Debt financing costs have improved.

Operational Performance

Operationally, FCR is firing on all cylinders.

Negative Factors

Business Plan Execution

Failure to execute on the three-year business plan is considered the primary risk.

Economic Outlook

The near-term economic outlook has become increasingly uncertain due to lower immigration targets and the threat of a protracted trade dispute with the U.S.

Interest Expenses

Interest expense increased due to refinancing debt maturities at higher interest rates.

First Capital Realty (FCR.UN) vs. S&P 500 (SPY)

Market Cap

C$3.56B

Dividend Yield5.19%

Average Volume (3M)494.78K

Price to Earnings (P/E)17.4

Beta (1Y)0.92

Revenue Growth6.55%

EPS GrowthN/A

CountryCA

Employees372

SectorReal Estate

Sector Strength83

IndustryREIT - Retail

Share Statistics

EPS (TTM)0.96

Shares Outstanding212,300,000

10 Day Avg. Volume398,730

30 Day Avg. Volume494,778

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$20.00

Price Target Upside19.12% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

First Capital Realty Business Overview & Revenue Model

Company DescriptionFirst Capital Realty (FCR.UN) is a leading Canadian real estate company focused on owning, operating, and developing high-quality, urban retail-centered properties. With a diversified portfolio, the company primarily serves the retail, residential, and mixed-use sectors, strategically located in Canada's largest cities. First Capital Realty aims to create thriving urban neighborhoods by delivering essential services and amenities to communities, thereby enhancing the overall value of its properties.

How the Company Makes MoneyFirst Capital Realty generates revenue primarily through the leasing and management of its retail-centered real estate properties. The company earns income from leasing space to a variety of tenants, including national retailers, local businesses, and service providers, ensuring a diversified and stable revenue stream. Additionally, First Capital Realty engages in strategic property development and redevelopment projects that enhance property values and increase rental income. The company also benefits from property appreciation and potential capital gains on asset sales. Key partnerships with retailers and other stakeholders contribute to the successful execution of its development strategies and long-term revenue growth.

First Capital Realty Financial Statement Overview

Summary

First Capital Realty exhibits solid operational efficiency and cash flow management, but faces challenges with revenue growth and net income stability. The balance sheet remains relatively strong but is becoming more leveraged over time. Overall, the company manages well but needs to address profitability consistency and top-line growth to enhance its financial standing.

Income Statement

Positive

First Capital Realty's gross profit margin has been relatively stable, demonstrating strong operational efficiency. However, the net profit margin is inconsistent due to fluctuating net income, affected by a significant net loss in 2023. Revenue growth has been minimal, with only a slight increase in 2024 after a decline in 2023, indicating challenges in expanding top-line growth.

Balance Sheet

Positive

The company maintains a moderate debt-to-equity ratio, suggesting a balanced approach to leveraging. However, the equity ratio has been decreasing slightly, indicating a potential increase in financial risk. Return on equity is inconsistent, reflecting volatility in net income, which poses a challenge to investor returns.

Cash Flow

Positive

The cash flow statement reveals healthy operating cash flow relative to net income, indicating efficient cash generation from operations. Free cash flow has shown growth in 2024, enhancing financial flexibility. However, the free cash flow to net income ratio is variable, reflecting fluctuations in profitability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
713.52M	755.87M	693.10M	674.89M	672.89M
	Gross Profit
447.29M	493.14M	425.50M	412.54M	399.03M
	EBIT
0.00	445.48M	399.26M	367.65M	383.41M
	EBITDA
386.27M	445.48M	3.15M	373.67M	389.00M
	Net Income Common Stockholders
204.93M	-134.06M	-159.76M	460.13M	7.48M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
153.54M	90.22M	36.03M	74.06M	104.16M
	Total Assets
9.18B	9.19B	9.58B	10.11B	10.03B
	Total Debt
4.05B	4.09B	4.14B	4.43B	4.79B
	Net Debt
3.90B	4.00B	4.11B	4.40B	4.69B
	Total Liabilities
5.17B	5.19B	5.25B	5.44B	5.78B
	Stockholders Equity
3.95B	3.93B	4.28B	4.62B	4.23B
Cash Flow		Free Cash Flow
110.02M	84.71M	126.21M	96.09M	14.47M
	Operating Cash Flow
233.79M	227.73M	251.22M	249.61M	219.50M
	Investing Cash Flow
33.38M	83.69M	133.98M	154.89M	10.23M
	Financing Cash Flow
-204.30M	-256.70M	-387.21M	-470.25M	-154.79M

First Capital Realty Technical Analysis

Technical Analysis Sentiment

Positive

Last Price16.79

Price Trends

50DMA

16.49

Positive

100DMA

16.63

Positive

200DMA

16.81

Negative

Market Momentum

MACD

0.05

Negative

RSI

58.82

Neutral

STOCH

93.16

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FCR.UN, the sentiment is Positive. The current price of 16.79 is above the 20-day moving average (MA) of 16.29, above the 50-day MA of 16.49, and below the 200-day MA of 16.81, indicating a neutral trend. The MACD of 0.05 indicates Negative momentum. The RSI at 58.82 is Neutral, neither overbought nor oversold. The STOCH value of 93.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FCR.UN.

First Capital Realty Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SRU.UN	76 Outperform	C$4.30B	19.01	4.50%	7.28%	9.46%	-42.77%
PLZ.UN	76 Outperform	C$410.78M	16.56	4.61%	7.49%	5.99%	20.38%
FCR.UN	72 Outperform	C$3.56B	17.40	5.20%	5.19%	6.55%	―
REI.UN	71 Outperform	$5.08B	10.85	6.34%	6.49%	11.62%	1120.60%
Sector *	59 Neutral	$2.74B	11.73	0.14%	8782.99%	5.34%	-16.62%
AX.UN	58 Neutral	$717.30M	―	-2.86%	8.27%	-10.56%	81.41%
HR.UN	56 Neutral	C$2.57B	―	-2.29%	6.12%	-6.92%	-296.31%

* Real Estate Sector Average

Performance Comparison

TSE:FCR.UN

First Capital Realty

16.83

2.74

19.45%

TSE:REI.UN

RioCan Real Estate Investment

17.21

0.72

4.38%

TSE:AX.UN

Artis Real Estate Investment

7.28

1.25

20.79%

TSE:SRU.UN

SmartCentres Real Estate Investment Trust

25.33

4.54

21.84%

TSE:PLZ.UN

Plaza Retail REIT

3.74

0.50

15.43%

TSE:HR.UN

H&R Real Estate ate Staple

9.79

1.39

16.55%

First Capital Realty Earnings Call Summary

Earnings Call Date:Feb 11, 2025

(Q4-2024)

% Change Since: 1.02%|

Next Earnings Date:May 06, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong performance in terms of growth in adjusted OFFO and improved debt metrics, demonstrating a successful start to the 3-year strategic plan. However, challenges were noted in interest expenses and achieving disposition volume targets amid a difficult market environment. Overall, the achievements in financial metrics and strategic initiatives slightly outweigh the challenges faced.

Q4-2024 Updates

Positive Updates

Strong OFFO Growth

Adjusted OFFO growth rate in 2024 was 5.4%, exceeding the target of 3% per annum over the 3-year plan period.

Improved Debt-to-EBITDA Ratio

Debt-to-EBITDA improved by 120 basis points to 8.7 times at year-end 2024, exceeding the target of a ratio in the low 9s.

Successful Disposition Strategy

$320 million in divestitures were completed in 2024, sold at an average premium to IFRS NAV of more than 50%.

Record Operating Metrics

Occupancy improved to 96.8%, just 10 basis points away from the all-time high, and average net rent reached an all-time high of $24.

Distribution Increase

A 3% increase in FCR's monthly distribution was approved, marking a significant milestone in growth and stability.

Negative Updates

Interest Expense Increase

Interest expense increased by 8% year-over-year, with Q4 2024 including $1.7 million of non-recurring costs related to early debt repayment.

Disposition Volume Shortfall

Although $320 million was achieved in dispositions, the initial goal was closer to $400 million for the first year.

Challenges in Disposition Market

The disposition market is challenging and remains impacted by broader macro uncertainties.

Company Guidance

During the Q4 2024 conference call, First Capital Realty provided detailed guidance on its strategic three-year plan initiated in early 2024. The plan includes a $1 billion divestiture program aimed at reshaping the company's balance sheet by reducing non-strategic and non-income-generating properties. The proceeds from these divestitures are allocated as follows: 40% for debt reduction, 40-50% for reinvestment in development projects, and the remainder for opportunistic uses, such as potential acquisitions or share repurchases. The company reported an Operating Funds From Operations (OFFO) of $1.36 per unit in 2024, representing a year-over-year growth rate of 14.9%, which adjusts to 5.4% when excluding non-recurring items. The largest contributor to this growth was a 4.4% increase in same-property Net Operating Income (NOI), driven by leasing activities. Additionally, First Capital aims to reduce its debt-to-EBITDA ratio to the low 9% by the end of 2024, achieving 8.7 times at year-end, and targets the low 8s by 2026. The company completed $320 million in divestitures in 2024, with an NOI yield of less than 3% and an average premium to IFRS NAV of over 50%. Looking forward, First Capital projects a 3% annual increase in FFO over the three-year plan, supported by ongoing improvements in its balance sheet and development investments.

First Capital Realty Corporate Events

Dividends

First Capital REIT Declares April 2025 Cash Distribution

Positive

Apr 15, 2025

First Capital REIT announced a cash distribution of $0.074167 per REIT unit for April, equating to $0.89 annually. This distribution, payable on May 15, 2025, reflects the company’s ongoing commitment to providing returns to its unitholders, reinforcing its stable position in the Canadian real estate market.

Spark’s Take on TSE:FCR.UN Stock

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

First Capital Realty’s stock is supported by strong operational efficiency, strategic initiatives leading to growth in OFFO, and a fair valuation with an attractive dividend yield. However, challenges with revenue growth, net income stability, and the disposition market present risks that temper the overall outlook.

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

Financial Disclosures

First Capital REIT Schedules Q1 2025 Results Conference Call

Neutral

Apr 7, 2025

First Capital REIT announced that it will hold a live conference call on May 7, 2025, to discuss its financial results for the first quarter ending March 31, 2025. The financial statements and management’s discussion and analysis will be available on their website and the Canadian Securities Administrators’ website prior to the call. This announcement highlights the company’s commitment to transparency and engagement with stakeholders, providing insights into its financial performance and strategic direction.

Spark’s Take on TSE:FCR.UN Stock

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

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

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy

First Capital REIT Elects Trustees, Reinforces Governance

Positive

Apr 1, 2025

First Capital REIT announced the successful election of all ten nominated trustees during its annual meeting of unitholders, with a significant representation of 81.59% of the trust’s issued and outstanding units. This election reaffirms the company’s governance stability and supports its strategic focus on maintaining a strong presence in prime Canadian neighborhoods, potentially benefiting stakeholders through sustained operational and market positioning strength.

Dividends

First Capital REIT Declares March 2025 Cash Distribution

Positive

Mar 17, 2025

First Capital REIT announced a cash distribution of $0.074167 per REIT unit for March, amounting to $0.89 annually. This distribution, payable on April 15, 2025, reflects the company’s ongoing commitment to providing returns to its unitholders, reinforcing its stable financial operations and strong market positioning.

Dividends

First Capital REIT Declares February 2025 Distribution

Positive

Feb 18, 2025

First Capital REIT announced a cash distribution of $0.074167 per REIT unit for February, equating to $0.89 annually. This distribution, payable on March 17, 2025, reflects the company’s ongoing commitment to providing returns to its unitholders and maintaining its strong position in the Canadian retail real estate sector.

DividendsBusiness Operations and StrategyFinancial Disclosures

First Capital Reports Robust Q4 and 2024 Financial Performance

Positive

Feb 11, 2025

First Capital Real Estate Investment Trust reported strong financial results for the fourth quarter and full year of 2024, showcasing significant improvements in key performance metrics. The company experienced a 3.4% growth in Same Property NOI and a total portfolio occupancy increase to 96.8%. Additionally, First Capital announced a 3% increase in monthly distributions effective January 2025, reflecting confidence in its strategic plan. The Trust achieved a 6% growth in normalized OFFO per unit, surpassing its annual average target, and improved its debt to EBITDA ratio, strengthening its financial position.

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.