H&R Real Estate ate Staple (TSE:HR.UN)
TSX:HR.UN
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H&R Real Estate ate Staple
(TSX:HR.UN)
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Rating:53Neutral
Price Target:
C$10.50
▲(1.84% Upside)
Action:ReiteratedDate:02/18/26
The score is held back primarily by weakening reported profitability and a thinner equity cushion, despite still-positive operating/free cash flow. Technical signals are subdued, while valuation is supported by a high dividend yield but undermined by losses (negative P/E). Earnings call commentary was balanced: modest NOI/FFO growth and disciplined payouts offset by industrial weakness, leasing headwinds, and leverage/vacancy risks.
Positive Factors
Positive cash generation
H&R continues to produce operating and free cash flow even in accounting loss years, providing durable internal funding for distributions, debt service and selective reinvestment. This recurring cash generation supports financial flexibility over the next several quarters despite weaker FCF trends.
Negative Factors
Deteriorating profitability
Reported earnings have deteriorated materially, with 2025 losses reducing retained earnings and eroding the earnings cushion. Persistent below-the-line markdowns and non-cash adjustments can suppress reported profitability, constraining internal capital buildup and raising execution risk for reinvestment and distributions.
Read all positive and negative factors
Positive Factors
Negative Factors
Positive cash generation
H&R continues to produce operating and free cash flow even in accounting loss years, providing durable internal funding for distributions, debt service and selective reinvestment. This recurring cash generation supports financial flexibility over the next several quarters despite weaker FCF trends.
Read all positive factors
H&R Real Estate ate Staple (HR.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$2.73B
Dividend Yield7.05%
Average Volume (3M)635.80K
Price to Earnings (P/E)―
Beta (1Y)0.53
Revenue Growth-0.83%
EPS Growth-56.21%
CountryCA
Employees777
SectorReal Estate
Sector Strength53
IndustryREIT - Diversified
Share Statistics
EPS (TTM)-0.95
Shares Outstanding264,557,920
10 Day Avg. Volume540,189
30 Day Avg. Volume635,797
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.65
Price to Sales (P/S)3.30
P/FCF Ratio18.34
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$12.17Price Target Upside18.04% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)1.17
Revenue Forecast (FY)C$806.07M
H&R Real Estate ate Staple Business Overview & Revenue Model
Company Description
H&R REIT is one of Canada's largest real estate investment trusts with total assets of approximately $13.3 billion at September 30, 2020. H&R REIT has ownership interests in a North American portfolio of high quality office, retail, industrial and...
How the Company Makes Money
H&R Real Estate generates revenue primarily through rental income from its diverse portfolio of properties, including retail, office, industrial, and residential assets. The company leases space to various tenants, receiving consistent rental paym...
H&R Real Estate ate Staple Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Neutral
The call presented a mixed but broadly balanced picture: modest positive operational and financial results (1.6% same-property NOI growth, FFO +1.4%, strong retail performance, Lantower stabilization and development momentum, and disciplined payout ratios) were offset by material challenges in industrial (sharp NOI and occupancy declines), near-term multifamily leasing/occupancy pressure in some Sunbelt markets, fair value markdowns in Long Island City, and leverage/execution risks tied to continued dispositions and a relatively high pro forma debt-to-EBITDA figure. Management conveyed cautious optimism and active balance-sheet management while acknowledging market headwinds.Positive Updates
Same-Property NOI and FFO Growth
Same-property net operating income (cash basis) grew 1.6% for the year ended Dec 31, 2025 vs. 2024. Funds from operations (FFO) were $1.21 per unit, a 1.4% increase from $1.20 in 2024.
Negative Updates
Industrial NOI Decline and Occupancy Fall
Industrial same-property NOI decreased 9% in Q4 2025 vs Q4 2024 and decreased 3.7% for the year. Industrial occupancy declined materially from 98.9% at Dec 31, 2024 to 90.7% at Dec 31, 2025.
Read all updates
Q4-2025 Updates
Positive
Negative
Same-Property NOI and FFO Growth
Same-property net operating income (cash basis) grew 1.6% for the year ended Dec 31, 2025 vs. 2024. Funds from operations (FFO) were $1.21 per unit, a 1.4% increase from $1.20 in 2024.
Read all positive updates
Company Guidance
Management guided that H&R delivered FFO of $1.21 per unit for 2025 (up 1.4% YoY) and same‑property NOI growth of 1.6% on a cash basis for the year, with FFO and AFFO payout ratios of 50% and 60% and about $527M of property sales completed in 2024–25 (proceeds used to repay debt). By segment, residential same‑property NOI rose 1.1% in Q4 and 1.2% for 2025 with same‑asset occupancy at 92.8% (‑2.2% YoY), Sunbelt blended trade‑outs −3.2% in Q4 (new leases −12.4%, renewals +4%, January blended −3.6%), a Sunbelt weighted cap rate of 4.9%, and 9 Sunbelt developments totaling ~2,900 suites at H&R’s share (West Love 90% occupied, Midtown 84%); office same‑property NOI +1.5% with 96% occupancy and a 5.2‑year average lease term but an expected 2026 vacancy increase tied to an ~189,000 sq ft RBC lease maturing (pro forma office will be ~12% of assets after four planned sales); retail NOI +4.4% Q4/+7% FY with remaining River Landing commercial expected to be ~4% of assets; industrial NOI fell 9% in Q4 and 3.7% for the year with occupancy down to 90.7% (from 98.9%), although three industrial developments (~360,000 sq ft at H&R’s share) are fully leased (two leases ~204,000 sq ft commencing Q1 2026, the third in Q4 2026). Pro forma leverage targets are ~41.8% debt to total assets and ~8.7x debt-to-EBITDA, management is not targeting material new acquisitions given cost of capital (only potential 1031 exchanges), and Lantower will transition to third‑party property management (Greystar) on April 1, 2026.H&R Real Estate ate Staple Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
56
Neutral
Cash Flow
63
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 815.13M | 816.99M | 903.63M | 834.64M | 1.07B |
| Gross Profit | 489.70M | 499.34M | 603.09M | 534.95M | 661.58M |
| EBITDA | -826.55M | -35.07M | 627.04M | 506.68M | 820.29M |
| Net Income | -791.56M | -119.71M | 61.69M | 844.82M | 597.91M |
Balance Sheet | |||||
| Total Assets | 9.11B | 10.62B | 10.78B | 11.41B | 10.50B |
| Cash, Cash Equivalents and Short-Term Investments | 52.14M | 100.35M | 64.11M | 76.89M | 124.14M |
| Total Debt | 3.50B | 3.54B | 3.72B | 3.95B | 3.92B |
| Total Liabilities | 4.97B | 5.34B | 5.59B | 5.93B | 5.73B |
| Stockholders Equity | 4.14B | 5.28B | 5.19B | 5.49B | 4.77B |
Cash Flow | |||||
| Free Cash Flow | 146.44M | 234.48M | 253.46M | 219.47M | 405.02M |
| Operating Cash Flow | 188.43M | 274.07M | 294.63M | 255.05M | 452.11M |
| Investing Cash Flow | -59.19M | 173.15M | 112.86M | 225.95M | 1.50B |
| Financing Cash Flow | -177.46M | -410.98M | -420.26M | -528.26M | -1.89B |
H&R Real Estate ate Staple Technical Analysis
Neutral
10.31
Price Trends
10.28
Negative
10.23
Negative
10.75
Negative
Market Momentum
-0.06
Negative
52.71
Neutral
86.11
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HR.UN, the sentiment is Neutral. The current price of 10.31 is above the 20-day moving average (MA) of 9.97, above the 50-day MA of 10.28, and below the 200-day MA of 10.75, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 52.71 is Neutral, neither overbought nor oversold. The STOCH value of 86.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:HR.UN.
H&R Real Estate ate Staple Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$3.08B | 24.31 | 6.29% | 5.82% | 6.32% | ― | |
71 Outperform | C$949.48M | 14.29 | 6.49% | 7.95% | 1.80% | 46.83% | |
70 Outperform | C$343.37M | 16.24 | 4.52% | 7.37% | 0.92% | 92.93% | |
69 Neutral | C$3.75B | 30.63 | 3.54% | 5.56% | 7.31% | 74.70% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
61 Neutral | C$2.01B | 69.28 | 0.93% | 4.42% | 6.19% | 79.98% | |
53 Neutral | C$2.73B | -2.68 | -17.10% | 7.05% | -0.83% | -56.21% |
* Real Estate Sector Average
TSE:HR.UN
H&R Real Estate ate Staple
10.31
1.40
15.74%
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H&R Real Estate ate Staple Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
H&R REIT Reshapes Portfolio With $5.4 Billion in Asset Sales and Spin-Off
Positive
Feb 12, 2026
HR REIT reported its fourth-quarter and full-year 2025 results alongside a major update on its multi-year strategic repositioning. Since mid-2021, the trust has spun off 27 enclosed shopping centres into Primaris REIT, sold ownership interests in ...
Business Operations and StrategyExecutive/Board ChangesFinancial DisclosuresM&A Transactions
H&R REIT Sells $1.1 Billion in Assets, Reshapes Lantower Residential Operations
Positive
Jan 29, 2026
HR REIT has completed a series of sizable retail and office asset sales, generating approximately $1.1 billion in gross proceeds and using roughly $727 million of net January proceeds to pay down corporate debt, while retaining management of the s...
Dividends
H&R REIT Announces January 2026 Monthly Distribution
Positive
Jan 9, 2026
HR Real Estate Investment Trust has declared a monthly cash distribution of $0.05 per unit for January 2026, equivalent to an annualized rate of $0.60 per unit, with a record date of January 30, 2026 and a distribution date of February 17, 2026. T...
Business Operations and StrategyM&A Transactions
H&R REIT Sells $1.5 Billion in Retail and Office Properties to Focus on Residential and Industrial Assets
Positive
Nov 25, 2025
HR REIT announced the sale of $1.5 billion worth of retail and office properties in Canada and the U.S., aligning with its strategy to simplify its portfolio and focus on residential and industrial assets. The proceeds will be used to strengthen t...
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.