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H&R Real Estate Staple (TSE:HR.UN)
:HR.UN
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H&R Real Estate ate Staple (HR.UN) AI Stock Analysis

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TSE:HR.UN

H&R Real Estate ate Staple

(TSX:HR.UN)

Rating:59Neutral
Price Target:
C$12.50
▲(6.56%Upside)
The overall stock score of 59 reflects significant financial challenges and valuation concerns, offset by positive technical indicators and strategic corporate activities. While there are growth prospects in the industrial and retail segments, challenges in the residential market and geopolitical uncertainties weigh heavily on the stock's outlook.
Positive Factors
Competitive Tension
Multiple interested parties have emerged, introducing competitive tension to the process.
Portfolio Streamlining
Efforts to streamline the portfolio towards multifamily and industrial assets are seen as catalysts for the stock.
Strategic Alternatives
The Board of Trustees formed a Special Committee to review strategic alternatives in response to an unsolicited expression of interest.
Negative Factors
Lease Spreads
Sunbelt blended lease spreads of -2.1% in Q1 improved 380bps sequentially, though Q2 spreads are just into positive territory.
Market Conditions
H&R has shown a propensity for strong execution on past dispositions, despite difficult macro conditions.
Office Portfolio
The office portfolio outlook remains somewhat uncertain, appealing to a more select group of opportunistic buyers.

H&R Real Estate ate Staple (HR.UN) vs. iShares MSCI Canada ETF (EWC)

H&R Real Estate ate Staple Business Overview & Revenue Model

Company DescriptionH&R Real Estate Investment Trust (HR.UN) is a leading diversified real estate investment trust based in Canada. The company is involved in the ownership, management, and development of a diverse portfolio of properties across multiple sectors, including office, retail, industrial, and residential real estate. With a focus on high-quality assets located in key markets, H&R Real Estate aims to deliver stable and sustainable distributions to its unitholders.
How the Company Makes MoneyH&R Real Estate Investment Trust generates revenue primarily through rental income from its extensive portfolio of properties. The company leases office spaces, retail outlets, industrial facilities, and residential units to a variety of tenants, providing a steady stream of rental payments. Additionally, H&R Real Estate may engage in property development and redevelopment projects, which can lead to capital appreciation and increased rental income over time. The company's earnings are also supported by strategic partnerships and joint ventures, allowing it to leverage expertise and resources to enhance its property offerings and market presence. Furthermore, H&R invests in property acquisitions and dispositions to optimize its portfolio and maximize returns, contributing to its overall revenue generation.

H&R Real Estate ate Staple Earnings Call Summary

Earnings Call Date:May 14, 2025
(Q1-2025)
|
% Change Since: 15.79%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong liquidity and growth in the industrial and retail segments. However, challenges in the residential market, geopolitical uncertainties, and difficulties in asset sales balanced the positive aspects.
Q1-2025 Updates
Positive Updates
Strong Liquidity Position
H&R REIT reported liquidity in excess of $870 million as of March 31, 2025, with an unencumbered property pool of approximately $4.5 billion.
Industrial Segment Performance
The industrial segment's same property net operating income increased by 4.5%, and the average Canadian industrial rent increased from $7.17 per square foot in June 2021 to $9.52 per square foot in March 2025.
Retail Segment Growth
Retail segment's same property net operating income increased by 8.2% due to occupancy gains at River Landing and Forex.
High Occupancy and Tenant Quality in Office Segment
Office occupancy was 96.7% with 87.8% of office revenue from investment-grade tenants; this segment saw a 1.2% increase in same property net operating income.
Negative Updates
Residential Segment Challenges
Residential segment's property net operating income decreased by 0.8% in U.S. dollars due to new supply and higher property operating costs.
Blended Lease Trade-Outs in Sunbelt Markets
Blended lease trade-outs in the Sunbelt were negative 2.1% in Q1, though there was an improvement from the previous quarter.
Market and Geopolitical Uncertainty
The company faces challenges due to multifamily supply concerns, weak office markets, inflation, and geopolitical uncertainties, including tariffs.
Echo Portfolio and Retail Asset Sales
Challenges in selling retail and Echo assets due to market conditions and liquidity issues in the debt and equity markets.
Company Guidance
During the H&R Real Estate Investment Trust's 2025 First Quarter Earnings Conference Call, the company provided insights into its financial and operational performance. The property net operating income grew by 4.4% on a cash basis, with the office segment seeing a 1.2% increase and the retail segment experiencing an 8.2% rise in same property net operating income. However, the residential segment saw a decrease of 0.8% due to declining average rental rates and higher operating costs in certain areas, while the industrial segment's income increased by 4.5%. The office occupancy rate stood at 96.7% with an average lease term of 5.8 years, and the retail portfolio comprised 15% of the overall portfolio value. The company maintained a strong balance sheet with a debt-to-total assets ratio of 44.1% and liquidity exceeding $870 million. Additionally, H&R REIT sold eight retail assets for $60 million and continued to focus on strategic asset recycling and development opportunities, particularly in the Sunbelt region. The REIT also highlighted the strong demand in its multifamily platform, stable resident retention, and ongoing development projects, including a pipeline of over 2,900 suites.

H&R Real Estate ate Staple Financial Statement Overview

Summary
H&R Real Estate Staple faces significant financial challenges, with declining revenues and profitability, increasing leverage, and operational inefficiencies. Despite stable cash flow generation, negative trends in income and balance sheet metrics underscore potential risks.
Income Statement
45
Neutral
The income statement shows a concerning trend with decreasing revenue and net income over the years. Gross profit margin has declined from 61.9% in 2019 to 61.1% in 2024, indicating reduced operational efficiency. There is a significant drop in net profit margin, from 29.6% in 2019 to -14.6% in 2024, reflecting increasing losses. The absence of EBIT and negative EBITDA in 2024 highlight ongoing operational challenges.
Balance Sheet
55
Neutral
The balance sheet reveals a declining equity base and increasing leverage. The debt-to-equity ratio has worsened from 0.91 in 2019 to 0.67 in 2024, reflecting a cautious improvement in leverage but still indicating high reliance on debt. Return on equity has turned negative, signifying inefficiencies in generating returns for shareholders. The equity ratio has also decreased, suggesting a declining proportion of assets financed by equity.
Cash Flow
60
Neutral
The cash flow statement presents a mixed picture. Operating cash flow has been relatively stable, but free cash flow has shown volatility. The free cash flow growth rate was negative from 2023 to 2024, highlighting potential liquidity issues. The operating cash flow to net income ratio indicates the company is generating cash despite net losses, but the free cash flow to net income ratio shows challenges in converting revenue into free cash flow.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue816.99M903.63M834.64M1.07B1.10B
Gross Profit499.34M603.09M534.95M661.58M663.67M
EBITDA-35.07M627.04M506.68M820.29M651.82M
Net Income-119.71M61.69M844.82M597.91M-624.56M
Balance Sheet
Total Assets10.62B10.78B11.41B10.50B13.36B
Cash, Cash Equivalents and Short-Term Investments100.35M64.11M76.89M124.14M62.86M
Total Debt3.54B3.72B3.95B3.92B6.40B
Total Liabilities5.34B5.59B5.93B5.73B7.28B
Stockholders Equity5.28B5.19B5.49B4.77B6.07B
Cash Flow
Free Cash Flow234.48M253.46M219.47M405.02M373.95M
Operating Cash Flow274.07M294.63M255.05M452.11M426.93M
Investing Cash Flow173.15M112.86M225.95M1.50B-183.24M
Financing Cash Flow-410.98M-420.26M-528.26M-1.89B-229.47M

H&R Real Estate ate Staple Technical Analysis

Technical Analysis Sentiment
Positive
Last Price11.73
Price Trends
50DMA
10.93
Positive
100DMA
10.32
Positive
200DMA
9.92
Positive
Market Momentum
MACD
0.28
Positive
RSI
55.95
Neutral
STOCH
9.76
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HR.UN, the sentiment is Positive. The current price of 11.73 is above the 20-day moving average (MA) of 11.70, above the 50-day MA of 10.93, and above the 200-day MA of 9.92, indicating a bullish trend. The MACD of 0.28 indicates Positive momentum. The RSI at 55.95 is Neutral, neither overbought nor oversold. The STOCH value of 9.76 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:HR.UN.

H&R Real Estate ate Staple Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
C$369.65M13.055.68%7.83%-1.07%684.07%
78
Outperform
C$326.57M8.358.03%8.34%3.34%10.20%
70
Neutral
C$2.72B-0.49%6.06%6.96%85.15%
64
Neutral
$6.87B17.44-1.93%6.95%4.65%-24.33%
59
Neutral
C$3.08B-3.89%6.33%-6.43%-35204.55%
57
Neutral
$747.06M-1.80%7.80%-13.42%86.55%
54
Neutral
C$363.47M-3.77%5.27%0.18%68.25%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:HR.UN
H&R Real Estate ate Staple
11.73
2.66
29.33%
TSE:AX.UN
Artis Real Estate Investment
7.69
1.43
22.90%
TSE:CRR.UN
Crombie Real Estate ate
14.69
1.66
12.74%
TSE:BTB.UN
BTB REIT
3.71
0.69
22.85%
TSE:MRT.UN
Morguard Real Estate ate
5.58
0.44
8.56%
TSE:PRV.UN
PRO Real Estate Investment
5.75
1.02
21.56%

H&R Real Estate ate Staple Corporate Events

DividendsBusiness Operations and Strategy
H&R REIT Declares July 2025 Distribution, Reinforces Strategic Focus
Positive
Jul 17, 2025

H&R Real Estate Investment Trust has declared a distribution of $0.05 per unit for July 2025, with a record date of July 31 and a distribution date of August 15. This announcement aligns with H&R’s strategy to focus on residential and industrial properties, aiming to generate sustainable long-term value for its unitholders. The move is part of H&R’s broader plan to simplify its business model by divesting office and retail properties, enhancing its position as a key player in the real estate sector, particularly in high-growth areas.

The most recent analyst rating on ($TSE:HR.UN) stock is a Buy with a C$11.50 price target. To see the full list of analyst forecasts on H&R Real Estate ate Staple stock, see the TSE:HR.UN Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
H&R REIT Explores Strategic Alternatives Amid Market Speculation
Neutral
Jul 4, 2025

H&R Real Estate Investment Trust has confirmed the formation of a special committee to explore strategic alternatives following unsolicited interest in a potential sale of the REIT or its assets. The committee is considering several non-binding offers but has not made any decisions or agreements. The REIT remains committed to its long-term strategy and will only pursue transactions that align with its best interests.

The most recent analyst rating on ($TSE:HR.UN) stock is a Buy with a C$12.00 price target. To see the full list of analyst forecasts on H&R Real Estate ate Staple stock, see the TSE:HR.UN Stock Forecast page.

Executive/Board ChangesShareholder Meetings
H&R REIT Announces Successful Trustee Re-Election and Executive Compensation Approval
Positive
Jun 27, 2025

H&R Real Estate Investment Trust announced the successful re-election of all trustee nominees at its 2025 annual meeting of unitholders, with approval ratings ranging from 94.18% to 99.85%. Additionally, a non-binding advisory resolution on executive compensation was passed with 93.78% approval. These outcomes reflect strong unitholder support for H&R’s strategic direction and governance, likely reinforcing its market position and stakeholder confidence.

The most recent analyst rating on ($TSE:HR.UN) stock is a Buy with a C$12.00 price target. To see the full list of analyst forecasts on H&R Real Estate ate Staple stock, see the TSE:HR.UN Stock Forecast page.

DividendsBusiness Operations and StrategyFinancial Disclosures
H&R REIT Schedules Q2 2025 Earnings Release and Declares June Distribution
Positive
Jun 19, 2025

H&R Real Estate Investment Trust announced the release date for its second-quarter 2025 financial results, scheduled for August 13, 2025, with a subsequent conference call on August 14, 2025. The company also declared a distribution for June 2025, reflecting its ongoing commitment to providing value to unitholders. This announcement underscores H&R’s strategic focus on growth in the residential and industrial sectors, as it continues to streamline its portfolio by selling off office and retail properties, thereby enhancing its position within the real estate market.

The most recent analyst rating on ($TSE:HR.UN) stock is a Buy with a C$12.00 price target. To see the full list of analyst forecasts on H&R Real Estate ate Staple stock, see the TSE:HR.UN Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
H&R REIT Reports Strong Q1 2025 Results Amid Strategic Asset Repositioning
Positive
May 14, 2025

H&R REIT reported its financial results for the first quarter of 2025, highlighting a successful quarter with a 4.4% growth in same-property net operating income and an occupancy rate of 95.6%. Despite a decrease in total assets and net income compared to the previous year, the company maintained stable funds from operations and a consistent payout ratio, reflecting a robust operational performance amid ongoing strategic asset sales.

The most recent analyst rating on ($TSE:HR.UN) stock is a Hold with a C$11.25 price target. To see the full list of analyst forecasts on H&R Real Estate ate Staple stock, see the TSE:HR.UN Stock Forecast page.

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: Jul 18, 2025