Plaza Retail REIT (PLZ.UN) AI Stock Analysis

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Plaza Retail REIT

(TSX:PLZ.UN)

Rating:77Outperform

Price Target:

C$5.00

▲(16.82% Upside)

Plaza Retail REIT's strong earnings call performance and technical indicators are the most significant factors driving the score. The company's stable financial performance and attractive valuation further support a positive outlook. However, caution is advised due to overbought technical signals.

Positive Factors

Cash Flow

Completing redevelopment projects should boost cash flow significantly.

Earnings

Solid leasing spreads drive 5.3% growth in FFO per unit.

Valuation

Plaza currently trades at an implied cap rate of 8.1%, representing a significant discount to the analyst's NAV estimate.

Negative Factors

Financial Performance

Funds from operations (FFO) per diluted unit was down 16% year-over-year and below consensus.

Interest Expenses

Interest expenses increased due to the rise in interest rates, impacting overall financial performance.

Operating Costs

FFO per unit drops 1% due to higher operating costs from a tougher winter and temporary dilution from asset sales.

Plaza Retail REIT (PLZ.UN) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$472.09M

Dividend Yield6.54%

Average Volume (3M)43.73K

Price to Earnings (P/E)13.6

Beta (1Y)0.45

Revenue Growth5.14%

EPS Growth209.83%

CountryCA

Employees98

SectorReal Estate

Sector Strength55

IndustryREIT - Retail

Share Statistics

EPS (TTM)0.11

Shares Outstanding110,430,466

10 Day Avg. Volume39,587

30 Day Avg. Volume43,729

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$4.50

Price Target Upside5.14% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Plaza Retail REIT Business Overview & Revenue Model

Company DescriptionPlaza is an open-ended real estate investment trust and is a leading retail property owner and developer, focused on Ontario, Quebec and Atlantic Canada. Plaza's portfolio at September 30, 2020 includes interests in 272 properties totaling approximately 8.6 million square feet across Canada and additional lands held for development. Plaza's portfolio largely consists of open-air centres and stand-alone small box retail outlets and is predominantly occupied by national tenants.

How the Company Makes MoneyPlaza Retail REIT generates revenue primarily through leasing retail space to tenants including national chains, regional retailers, and local businesses. The company's key revenue streams include rental income from long-term leases, percentage rents linked to tenant sales performance, and ancillary income from services such as property management and development fees. Plaza Retail REIT also benefits from its strategic partnerships with major retailers and the implementation of value-enhancing property upgrades and developments, which can lead to increased rental rates and occupancy levels. Additionally, the REIT may engage in the acquisition and disposition of properties to optimize its portfolio and realize capital gains.

Plaza Retail REIT Earnings Call Summary

Earnings Call Date:Aug 07, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 06, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong performance metrics and strategic achievements, including record occupancy rates, robust leasing spreads, and successful development projects. While there were some short-term negative impacts on AFFO and challenges from tenant closures, the overall sentiment is positive due to the outweighing highlights.

Q2-2025 Updates

Positive Updates

Record Occupancy Rate

Plaza achieved an all-time high committed occupancy rate of 98%, with occupancy reaching near-perfect levels of 99% excluding enclosed malls.

Strong Leasing Performance

Same-property NOI increased by 1.5% year-over-year, with blended leasing spreads of 14.8% over the renewal term, and negotiated renewals nearing 20%.

Significant Development Projects

Approximately 300,000 square feet of intensifications, developments, and strategic optimization projects are underway, expected to generate a 17% unlevered return.

Successful Property Acquisitions

Increased ownership in three Shoppers Drug Mart properties in Ontario from 25% to 100%, with properties valued at approximately $23 million.

Capital Recycling Initiative Success

Sold nine properties at prices exceeding IFRS values by 5%, supporting capital for strategic projects and debt reduction.

Financial Metrics Improvement

Total NOI increased by 3.8%, FFO per unit rose by 5.3%, and debt-to-assets ratio improved by 40 bps to 50.9% compared to the previous year.

Negative Updates

Negative Impact on AFFO

Leasing costs from optimization projects had a short-term negative impact on AFFO, reducing it by 4.8% on a per unit basis.

Tenant Closures Affect NOI

Same-asset NOI was impacted by bad debt recognized from two tenant closures during the quarter.

Company Guidance

During the Plaza Retail REIT Second Quarter 2025 earnings call, key metrics were highlighted, showcasing the company's robust performance and strategic initiatives. The same-property NOI increased by 1.5% year-over-year, supported by strong leasing activity and effective expense management. The committed occupancy rate reached an all-time high of 98%, climbing to nearly 99% when excluding enclosed malls. Blended leasing spreads over the renewal term were at 14.8%, with negotiated renewals just under 20%, reflecting the company's ability to leverage in-place versus market rents. Plaza is engaged in preconstruction or construction of around 300,000 square feet of intensification projects, expected to deliver a 17% unlevered return. Despite short-term impacts on AFFO due to $3.7 million in leasing costs, these projects are forecasted to generate $650,000 in incremental NOI. The company also increased ownership in three Shoppers Drug Mart properties to 100% and successfully sold nine properties at prices exceeding IFRS values by about 5%. With a debt-to-assets ratio of 50.9% and liquidity of $62 million, Plaza is well-positioned to capitalize on future opportunities.

Plaza Retail REIT Financial Statement Overview

Summary

Plaza Retail REIT demonstrates stable financial health with consistent revenue and net income growth. The balance sheet shows moderate leverage, typical for the REIT industry, and effective cash flow management despite a slight decline in operating cash flow.

Income Statement

Positive

The income statement shows a moderate growth trend in revenue from 2023 to 2024 (6.34%). Gross profit margin is stable at around 61.3%. However, the absence of EBIT in 2024 is a concern, potentially impacting profitability analysis. The net profit margin improved slightly to 20.65% from 17.69% in 2023, indicating better cost management or revenue growth.

Balance Sheet

Positive

The balance sheet shows a stable equity position with a debt-to-equity ratio of approximately 1.22, indicating moderate leverage for a REIT. The equity ratio is 43.61%, reflecting a balanced asset structure. Return on equity increased to 4.63% in 2024, showing improved profitability relative to shareholder's equity.

Cash Flow

Positive

Cash flow analysis reveals a decline in operating cash flow from 2023 to 2024 by 5.74%, which may indicate operational challenges. However, free cash flow remains stable, showing effective capital expenditure management. The operating cash flow to net income ratio is 1.59, suggesting efficient cash generation relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	126.09M	121.28M	114.06M	111.25M	110.63M	106.90M
Gross Profit	77.62M	74.36M	70.35M	70.58M	71.78M	68.75M
EBITDA	69.55M	57.32M	64.63M	81.34M	70.51M	64.48M
Net Income	35.15M	25.05M	20.19M	53.89M	99.61M	-14.94M
Balance Sheet
Total Assets	1.28B	1.24B	1.26B	1.27B	1.21B	1.14B
Cash, Cash Equivalents and Short-Term Investments	8.61M	8.87M	10.87M	7.26M	8.06M	8.27M
Total Debt	683.72M	657.22M	672.47M	708.14M	679.24M	681.13M
Total Liabilities	731.63M	696.37M	714.49M	747.71M	716.94M	712.23M
Stockholders Equity	547.30M	540.82M	546.49M	518.90M	493.52M	422.41M
Cash Flow
Free Cash Flow	42.70M	39.86M	42.29M	80.69M	69.39M	60.87M
Operating Cash Flow	42.70M	39.86M	42.29M	38.47M	48.21M	31.72M
Investing Cash Flow	-5.80M	5.34M	-10.00M	-44.90M	-21.95M	-27.77M
Financing Cash Flow	-30.34M	-23.29M	-40.23M	1.15M	-26.33M	-20.64M

Plaza Retail REIT Technical Analysis

Technical Analysis Sentiment

Positive

Last Price4.28

Price Trends

50DMA

4.01

Positive

100DMA

3.86

Positive

200DMA

3.67

Positive

Market Momentum

MACD

0.06

Positive

RSI

78.86

Negative

STOCH

80.35

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PLZ.UN, the sentiment is Positive. The current price of 4.28 is above the 20-day moving average (MA) of 4.17, above the 50-day MA of 4.01, and above the 200-day MA of 3.67, indicating a bullish trend. The MACD of 0.06 indicates Positive momentum. The RSI at 78.86 is Negative, neither overbought nor oversold. The STOCH value of 80.35 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:PLZ.UN.

Plaza Retail REIT Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PLZ.UN	77 Outperform	C$472.09M	13.57	6.45%	6.54%	5.14%	209.83%
Sector *	63 Neutral	$7.06B	13.54	-0.50%	6.96%	4.08%	-25.24%
RIOCF	―	$3.96B	19.35	3.81%	6.06%	―	―
CRT.UN	81 Outperform	C$3.85B	8.69	11.08%	5.96%	4.26%	72.02%
SGR.UN	78 Outperform	C$854.95M	15.56	5.88%	8.49%	2.96%	17.08%
FCR.UN	73 Outperform	C$4.11B	15.73	6.58%	4.70%	2.53%	―
SRU.UN	72 Outperform	C$4.60B	20.88	4.42%	6.86%	7.01%	-15.80%

* Real Estate Sector Average

Performance Comparison

TSE:PLZ.UN

Plaza Retail REIT

4.28

0.85

24.78%

RIOCF

RioCan Real Estate Investment

13.42

0.53

4.11%

TSE:CRT.UN

CT Real Estate Investment

16.11

1.67

11.57%

TSE:FCR.UN

First Capital Realty

19.34

2.52

14.98%

TSE:SGR.UN

Slate Grocery REIT

14.24

2.83

24.80%

TSE:SRU.UN

SmartCentres Real Estate Investment Trust

26.96

3.05

12.76%

Plaza Retail REIT Corporate Events

Business Operations and StrategyFinancial Disclosures

Plaza Retail REIT Reports Robust Q2 2025 Results with Strategic Growth Initiatives

Positive

Aug 7, 2025

Plaza Retail REIT reported strong financial results for the second quarter of 2025, with significant growth in profit and comprehensive income driven by the optimization of existing properties and strategic acquisitions. The company is actively converting spaces into grocery-anchored properties to enhance value and liquidity, and has increased its ownership in key properties, achieving high occupancy rates and leasing spreads.

The most recent analyst rating on ($TSE:PLZ.UN) stock is a Hold with a C$4.00 price target. To see the full list of analyst forecasts on Plaza Retail REIT stock, see the TSE:PLZ.UN Stock Forecast page.

Financial Disclosures

Plaza Retail REIT Schedules Q2 2025 Financial Results Conference Call

Neutral

Jul 17, 2025

Plaza Retail REIT has announced a live conference call to discuss its second quarter 2025 financial results, scheduled for August 8, 2025. The financial statements and management’s discussion will be available on Plaza’s website and SEDAR+ prior to the call. This announcement highlights Plaza’s commitment to transparency and engagement with stakeholders, potentially impacting investor confidence and market positioning.

Dividends

Plaza Retail REIT Declares July 2025 Distribution

Positive

Jul 16, 2025

Plaza Retail REIT announced its July 2025 monthly distribution of $0.02333 per unit, payable on August 15, 2025, to unitholders of record as of July 31, 2025. This distribution reflects Plaza’s ongoing commitment to providing consistent returns to its investors, reinforcing its position as a stable player in the Canadian retail property market.

Dividends

Plaza Retail REIT Declares June 2025 Distribution

Positive

Jun 17, 2025

Plaza Retail REIT announced its June 2025 monthly distribution of $0.02333 per unit, payable on July 15, 2025, to unitholders of record as of June 30, 2025. This announcement reflects Plaza’s ongoing commitment to providing consistent returns to its investors, reinforcing its stable position in the retail property market across Canada, particularly in essential needs and value segments.

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy

Plaza Retail REIT Elects Board of Trustees, Strengthening Market Position

Positive

May 30, 2025

Plaza Retail REIT announced the successful election of its board of trustees at the annual meeting of unitholders, with all proposed nominees being elected. This election reinforces Plaza’s strategic positioning in the retail property market, ensuring continued focus on its core markets and tenant segments, which could have positive implications for stakeholders by maintaining stability and growth in its operations.

Dividends

Plaza Retail REIT Declares May 2025 Distribution

Positive

May 15, 2025

Plaza Retail REIT announced its May 2025 monthly distribution of $0.02333 per unit, payable on June 16, 2025, to unitholders of record as of May 30, 2025. This announcement reflects Plaza’s ongoing commitment to providing consistent returns to its investors, reinforcing its stable position in the retail property market across Canada.

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 19, 2025