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H&R Real Estate ate Staple (TSE:HR.UN)
TSX: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:55Neutral
Price Target:
C$12.00
▲(0.42% Upside)
The overall stock score reflects a company facing financial challenges, with declining revenues and profitability. However, technical indicators show positive momentum, and the dividend yield offers some appeal. The earnings call highlighted both growth opportunities and significant challenges, particularly in the industrial segment and transaction costs.
Positive Factors
Asset Dispositions
Improving U.S. sunbelt multifamily fundamentals and potential execution of asset dispositions could serve as catalysts for the units.
Portfolio Streamlining
Efforts to streamline the portfolio towards multifamily and industrial assets are seen as catalysts for the stock.
Strategic Alternatives
Multiple interested parties have emerged, introducing competitive tension to the process.
Negative Factors
Lease Spreads
Sunbelt blended lease spreads of -2.1% in Q1 improved 380bps sequentially, though Q2 spreads are just into positive territory.
Office Portfolio Outlook
The office portfolio outlook remains somewhat uncertain, appealing to a more select group of opportunistic buyers.
Valuation Discount
Valuation provides a fairly wide fairway for potential buyers, with H&R trading at a significant discount to NAV.

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 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 residential properties comprising over 40 million square feet.
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:Aug 13, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 17, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with notable growth in several segments, such as the office and retail segments, and recognition for Lantower Residential. However, these positives were counterbalanced by challenges in the industrial segment, significant transaction costs, and substantial asset write-downs.
Q2-2025 Updates
Positive Updates
Growth in Same-Property Net Operating Income
The company reported a 3.4% growth in same-property net operating income on a cash basis for the six months ended June 30, 2025, compared to the same period last year.
Increase in Funds from Operations (FFO)
FFO was $0.314 per unit for the three months ended June 30, 2025, representing a 2.6% increase from the same period last year.
Strong Office Occupancy
Office occupancy at June 30, 2025, was 96.8% with an average remaining lease term of 5.5 years. 87.6% of office revenue comes from investment-grade tenants.
Retail Segment Performance
Retail segment same-property net operating income on a cash basis increased by 8.2% due to occupancy gains at River Landing and foreign exchange differences.
Lantower Residential Achievements
Despite challenges, Lantower Residential maintained strong resident retention and disciplined expense management. Notably, Lantower Residential was awarded Fortune's Best Workplaces in Texas for the second year in a row.
Negative Updates
Industrial Segment Decline
Industrial segment same-property net operating income decreased by 2.4%. Industrial occupancy dropped from 98.9% at December 31, 2024, to 89.9% at June 30, 2025.
Transaction Costs
During the three and six months ended June 30, 2025, H&R incurred $8.7 million in transaction costs related to potential transactions, which primarily consist of legal and adviser fees.
Office and Land Write-downs
A $280 million fair value adjustment was reported, largely due to office properties and land write-downs, contributing to a 9% IFRS NAV drop.
Company Guidance
During H&R Real Estate Investment Trust's second quarter of 2025 earnings call, several key financial metrics and strategic updates were discussed. The REIT reported a 3.4% increase in same-property net operating income (NOI) on a cash basis for the first half of 2025 compared to the same period in 2024. The Funds from Operations (FFO) for the quarter was $0.314 per unit, marking a 2.6% increase from the previous year. The portfolio composition by segment was highlighted, with residential properties accounting for 48% of the asset value, and a significant 70% of the real estate assets by value located in the United States. The office segment saw a 2% rise in same-property NOI, with an occupancy rate of 96.8% and an average lease term of 5.5 years. However, the industrial segment experienced a 2.4% decline in same-property NOI due to a decrease in occupancy from 98.9% to 89.9%, presenting an opportunity for rent growth. The REIT maintained a strong balance sheet with a debt-to-total assets ratio of 45.5% and a debt-to-EBITDA ratio of 9.2x. A special committee is evaluating strategic alternatives following an unsolicited expression of interest, with $8.7 million spent on related transaction costs during the first half of 2025.

H&R Real Estate ate Staple Financial Statement Overview

Summary
The company faces challenges with declining revenues and profitability, as reflected in negative net income and revenue growth. While the balance sheet shows manageable leverage, the negative return on equity indicates profitability issues. Cash flow generation is a concern, with declining free cash flow growth, but cash conversion remains efficient. The company needs to address revenue growth and profitability to improve its financial health.
Income Statement
45
Neutral
The income statement shows declining revenue with a negative revenue growth rate of -9.4% TTM. The company has a negative net profit margin of -11.97% TTM, indicating losses. However, the gross profit margin remains relatively healthy at 60.02% TTM, suggesting efficient cost management. The EBIT margin is positive at 10.80% TTM, but the EBITDA margin is low at 4.33% TTM, reflecting potential challenges in operational efficiency.
Balance Sheet
55
Neutral
The balance sheet reveals a moderate debt-to-equity ratio of 0.73 TTM, indicating manageable leverage. However, the return on equity is negative at -1.93% TTM, reflecting poor profitability. The equity ratio is stable, suggesting a balanced capital structure, but the negative ROE highlights the need for improved earnings.
Cash Flow
50
Neutral
Cash flow analysis shows a decline in free cash flow growth at -9.48% TTM, indicating potential liquidity concerns. The operating cash flow to net income ratio is 0.12 TTM, suggesting limited cash generation relative to net losses. However, the free cash flow to net income ratio is strong at 82.16% TTM, indicating efficient cash conversion despite net losses.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue812.34M816.99M903.63M834.64M1.07B1.10B
Gross Profit487.58M499.34M603.09M534.95M661.58M663.67M
EBITDA35.17M-35.07M627.04M506.68M820.29M651.82M
Net Income-97.23M-119.71M61.69M844.82M597.91M-624.56M
Balance Sheet
Total Assets9.89B10.62B10.78B11.41B10.50B13.36B
Cash, Cash Equivalents and Short-Term Investments60.09M100.35M64.11M76.89M124.14M62.86M
Total Debt3.45B3.54B3.72B3.95B3.92B6.40B
Total Liabilities5.17B5.34B5.59B5.93B5.73B7.28B
Stockholders Equity4.72B5.28B5.19B5.49B4.77B6.07B
Cash Flow
Free Cash Flow195.26M234.48M253.46M219.47M405.02M373.95M
Operating Cash Flow237.66M274.07M294.63M255.05M452.11M426.93M
Investing Cash Flow20.20M173.15M112.86M225.95M1.50B-183.24M
Financing Cash Flow-272.28M-410.98M-420.26M-528.26M-1.89B-229.47M

H&R Real Estate ate Staple Technical Analysis

Technical Analysis Sentiment
Positive
Last Price11.95
Price Trends
50DMA
11.66
Positive
100DMA
10.82
Positive
200DMA
10.08
Positive
Market Momentum
MACD
0.12
Positive
RSI
56.05
Neutral
STOCH
28.15
Neutral
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 11.95 is above the 20-day moving average (MA) of 11.86, above the 50-day MA of 11.66, and above the 200-day MA of 10.08, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 56.05 is Neutral, neither overbought nor oversold. The STOCH value of 28.15 is Neutral, 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
C$389.10M13.865.27%7.73%-0.28%206.65%
76
Outperform
C$324.83M8.567.80%8.25%1.59%19.74%
69
Neutral
C$2.75B-0.21%5.94%6.86%92.60%
65
Neutral
$2.09B15.753.79%4.99%4.78%6.63%
55
Neutral
C$3.14B-1.99%6.21%-5.67%54.92%
51
Neutral
C$375.61M-3.72%4.29%-2.90%68.88%
$502.67M-3.37%8.13%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:HR.UN
H&R Real Estate ate Staple
11.95
1.98
19.86%
TSE:BTB.UN
BTB REIT
3.75
0.65
20.97%
TSE:CRR.UN
Crombie Real Estate ate
15.00
0.80
5.63%
TSE:MRT.UN
Morguard Real Estate ate
5.74
0.63
12.33%
TSE:PRV.UN
PRO Real Estate Investment
5.80
0.82
16.47%
ARESF
Artis Real Estate Investment
5.29
0.18
3.52%

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: Aug 20, 2025