Morguard Real Estate ate (MRT.UN) AI Stock Analysis

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Morguard Real Estate ate

(TSX:MRT.UN)

Rating:59Neutral

Price Target:―

Morguard Real Estate's overall score is influenced by its stable revenue and operational efficiency but weighed down by negative net income and high leverage. While technical indicators show positive momentum, caution is warranted due to potential overbought conditions. Valuation remains a concern with negative earnings, though the dividend yield provides some appeal. Earnings call insights reflect ongoing challenges with some positive developments, particularly in cost management and select asset performance.

Morguard Real Estate ate (MRT.UN) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$384.17M

Dividend Yield4.05%

Average Volume (3M)31.24K

Price to Earnings (P/E)―

Beta (1Y)0.27

Revenue Growth0.18%

EPS Growth68.25%

CountryCA

Employees8

SectorReal Estate

Sector Strength64

IndustryREIT - Diversified

Share Statistics

EPS (TTM)-0.18

Shares Outstanding64,784,400

10 Day Avg. Volume30,979

30 Day Avg. Volume31,239

Financial Highlights & Ratios

PEG Ratio-0.26

Price to Book (P/B)0.44

Price to Sales (P/S)0.00

P/FCF Ratio19.35

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$5.50

Price Target Upside-7.25% Downside

Rating ConsensusHold

Number of Analyst Covering1

Morguard Real Estate ate Business Overview & Revenue Model

Company DescriptionMorguard Real Estate Investment Trust (MRT.UN) is a Canada-based closed-end real estate investment trust. The company specializes in owning, managing, and developing a diversified portfolio of commercial properties across Canada. Its portfolio includes retail, office, and industrial properties, providing comprehensive real estate solutions to a variety of tenants. The trust focuses on maximizing long-term value through strategic property acquisitions, development, and proactive management of its assets.

How the Company Makes MoneyMorguard Real Estate Investment Trust generates revenue primarily through the leasing of its commercial properties. The trust collects rental income from tenants occupying its retail, office, and industrial spaces. This rental income forms the core of its revenue stream. Additionally, MRT.UN may engage in property development and redevelopment projects, which can contribute to revenue through increased property values and rental rates. The trust also focuses on enhancing property operations and tenant services to maintain high occupancy rates and tenant satisfaction, which are crucial for sustaining and growing rental income. Key factors contributing to its earnings include strategic property management, market conditions, and maintaining a balanced and diversified property portfolio.

Morguard Real Estate ate Financial Statement Overview

Summary

Morguard Real Estate exhibits a stable revenue base and operational efficiency, yet struggles with profitability and high leverage. The negative net income and persistent debt levels are concerning, although the company's ability to generate free cash flow offers a silver lining. Strategic financial restructuring and improved profitability are essential for enhancing financial health and reducing leverage risk.

Income Statement

Neutral

The income statement reveals a challenging financial trajectory. Despite maintaining a steady revenue stream, the company is experiencing negative net income, indicating profitability issues. The TTM (Trailing-Twelve-Months) data shows a gross profit margin of 48.24% and an EBIT margin of 47.20%, which are strong relative to revenues, but the net profit margin is negative due to significant net losses. Revenue growth is modest, with a slight decline from the previous annual report, suggesting growth stagnation. The consistency in gross profit margin suggests stable operational efficiency, but persistent net losses highlight underlying financial challenges.

Balance Sheet

Neutral

The balance sheet displays a stable but leveraged financial position. The debt-to-equity ratio stands at 1.43, indicating a significant reliance on debt financing, which poses a risk if not managed effectively. The equity ratio of 40.03% suggests a moderate proportion of assets financed by equity, providing some buffer against liabilities. However, the return on equity remains negative due to ongoing net losses, reflecting the need for strategic financial adjustments to enhance profitability.

Cash Flow

Positive

The cash flow statement presents a mixed picture. The free cash flow has grown significantly in the TTM period, indicating improved operational cash management. The operating cash flow to net income ratio is negative, reflecting the company's ongoing challenges in translating operational activities into net profit. However, the positive free cash flow to net income ratio indicates that the company manages to generate cash despite reported losses, providing some resilience.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
255.12M	259.17M	255.08M	242.63M	241.44M	253.76M
	Gross Profit
123.09M	128.23M	125.97M	121.99M	122.13M	123.78M
	EBIT
120.41M	124.64M	-15.06M	114.85M	117.19M	117.01M
	EBITDA
46.88M	6.09M	123.90M	-34.05M	117.27M	-302.67M
	Net Income Common Stockholders
-33.71M	-58.82M	-74.44M	-138.06M	-47.38M	-410.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.43M	7.90M	7.28M	9.71M	11.27M	8.65M
	Total Assets
2.17B	2.17B	2.28B	2.38B	2.49B	2.56B
	Total Debt
1.24B	1.23B	1.26B	1.27B	1.30B	1.35B
	Net Debt
1.23B	1.23B	1.25B	1.26B	1.29B	1.35B
	Total Liabilities
1.30B	1.29B	1.32B	1.33B	1.34B	1.40B
	Stockholders Equity
869.63M	884.23M	961.18M	1.05B	1.15B	1.16B
Cash Flow		Free Cash Flow
19.89M	12.12M	27.28M	41.55M	63.14M	15.10M
	Operating Cash Flow
50.26M	54.46M	66.32M	73.97M	80.19M	46.92M
	Investing Cash Flow
-3.52M	-5.28M	-39.04M	-32.42M	-2.95M	-25.02M
	Financing Cash Flow
-45.56M	-48.55M	-29.71M	-43.11M	-74.62M	-19.04M

Morguard Real Estate ate Technical Analysis

Technical Analysis Sentiment

Positive

Last Price5.93

Price Trends

50DMA

5.60

Positive

100DMA

5.54

Positive

200DMA

5.46

Positive

Market Momentum

MACD

0.10

Negative

RSI

72.86

Negative

STOCH

82.01

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MRT.UN, the sentiment is Positive. The current price of 5.93 is above the 20-day moving average (MA) of 5.69, above the 50-day MA of 5.60, and above the 200-day MA of 5.46, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 72.86 is Negative, neither overbought nor oversold. The STOCH value of 82.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MRT.UN.

Morguard Real Estate ate Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FCD.UN	80 Outperform	C$221.56M	7.80	9.43%	8.67%	5.06%	43.11%
BTB.UN	78 Outperform	C$310.73M	7.97	8.03%	8.50%	3.34%	10.20%
NET.UN	73 Outperform	C$108.56M	6.78	11.99%	6.53%	-0.90%	9.33%
PRV.UN	72 Outperform	C$323.79M	12.05	5.68%	8.43%	-1.07%	684.07%
Sector *	60 Neutral	$2.76B	10.33	0.49%	8507.90%	5.95%	-17.56%
MRT.UN	59 Neutral	C$384.17M	―	-3.77%	4.05%	0.18%	68.25%

* Real Estate Sector Average

Performance Comparison

TSE:MRT.UN

Morguard Real Estate ate

5.93

0.82

16.05%

TSE:BTB.UN

BTB REIT

3.53

0.55

18.46%

TSE:NET.UN

Canadian Net Real Estate Investment Trust Trust Units

5.28

0.67

14.53%

TSE:FCD.UN

Firm Capital Property

6.00

1.40

30.43%

TSE:PRV.UN

PRO Real Estate Investment

5.34

0.62

13.14%

Morguard Real Estate ate Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 6.08%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a challenging quarter for Morguard REIT, with significant declines in net operating income, occupancy levels, and fair value losses. However, there are positive aspects in community strip centers' performance, enclosed malls' growth, and improved liquidity and interest expenses. Positive leasing efforts at Penn West Plaza provide some optimism despite market challenges.

Q1-2025 Updates

Positive Updates

Community Strip Centers Occupancy

Community strip centers are nearly fully occupied at 99% and achieved a 7% same asset increase in net operating income for the first quarter.

Enclosed Malls Performance

Enclosed malls are performing well with positive leasing spreads and a three-year average annual same-asset net operating income growth of 6.5%.

Interest Expense Reduction

Interest expense declined by almost $900,000 for the quarter due to a $28 million decline in gross debt year-over-year and lower interest rates.

Liquidity Improvement

Liquidity at the end of the quarter was $87 million, up from $81 million at the end of the previous year.

Positive Leasing Efforts at Penn West Plaza

Penn West Plaza achieved an 80% occupancy level despite market challenges.

Negative Updates

Decline in Total Net Operating Income

Total net operating income for the quarter declined from $30.9 million last year to $25.7 million in 2025, mainly due to the Penn West Plaza lease reset and increased bad debt expense.

Impact of Retail Failures

Retail failures, including The Bay and Comark Group of Brands, have put approximately $2.35 million in gross income at risk and resulted in increased vacancies.

Occupancy Level Decrease

Overall occupancy level decreased to 87.7% at the end of the quarter from 91.2% at the end of the previous year, primarily due to increased vacancy at Penn West Plaza.

Fair Value Losses

The trust experienced $21 million in fair value losses due to increased regional office cap rates and fair value adjustments in enclosed malls.

Company Guidance

During the conference call discussing Morguard Real Estate Investment Trust's first quarter results for 2025, several key metrics and insights were highlighted. The trust experienced a decline in total net operating income from $30.9 million in Q1 2024 to $25.7 million in Q1 2025, primarily due to a $3 million impact from the Penn West Plaza lease reset and a $1 million increase in bad debt expenses. Additionally, the sale of Heritage Town Center in 2024 contributed to a $700,000 decrease. Despite these challenges, Penn West Plaza achieved an 80% occupancy rate when factoring in future commitments, although the net operating income for this asset is expected to decline by approximately $15 million in 2025. The trust is addressing the effects of retail failures, including The Bay's creditor protection filing, which risks $1.5 million in gross income, and Comark Group's proceedings, potentially leading to an $850,000 annual income decline. On the positive side, community strip centers reported a 99% occupancy rate and a 7% increase in same-asset net operating income, while enclosed malls enjoyed a 6.5% average annual growth over three years. Interest expenses decreased by $900,000 due to a $28 million reduction in gross debt and lower interest rates, with liquidity rising to $87 million from $81 million at the previous year-end. The trust's occupancy level decreased to 87.7% from 91.2% due to increased Penn West Plaza vacancies. The trust remains focused on debt reduction, having lowered it by over $100 million in four years, and plans strategic developments, including a $6.4 million capital commitment for St. Laurent enhancements.

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.