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RioCan Real Estate Investment Trust (TSE:REI.UN)
TSX:REI.UN
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RioCan Real Estate Investment (REI.UN) AI Stock Analysis

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TSE:REI.UN

RioCan Real Estate Investment

(TSX:REI.UN)

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Outperform 75 (OpenAI - 4o)
Rating:75Outperform
Price Target:
C$20.50
▲(8.47% Upside)
RioCan Real Estate Investment's strong earnings call performance and attractive valuation are the most significant factors driving the score. Financial performance shows solid growth but is tempered by declining margins and increased leverage. Technical analysis supports a positive trend, contributing to a favorable outlook.
Positive Factors
Negative Factors

RioCan Real Estate Investment (REI.UN) vs. iShares MSCI Canada ETF (EWC)

RioCan Real Estate Investment Business Overview & Revenue Model

Company DescriptionRioCan is one of Canada's largest real estate investment trusts. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at September 30, 2020, our portfolio is comprised of 221 properties with an aggregate net leasable area of approximately 38.4 million square feet (at RioCan's interest) including office, residential rental and 16 development properties.
How the Company Makes MoneyRioCan generates revenue primarily through rental income from its diverse portfolio of retail and mixed-use properties. The company leases spaces to a variety of tenants, including national and local retailers, service providers, and residential units, which contribute to stable and recurring cash flow. Additionally, RioCan pursues development projects that add value to its existing properties, increasing overall income potential. The company also benefits from strategic partnerships with various stakeholders in the real estate sector, enhancing its ability to acquire, develop, and manage properties efficiently. Factors such as market demand, property location, and the overall economic environment significantly influence its earnings.

RioCan Real Estate Investment Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong operational performance with significant leasing spreads, increased funds from operations, and successful capital management strategies. However, challenges with the HBC joint venture and a slight decrease in retail occupancy were noted. The overall tone suggests optimism due to strategic management and financial health.
Q2-2025 Updates
Positive Updates
Strong Leasing Spreads
New leasing spreads reached 51.5%, with blended leasing spreads at 20.6% this quarter, demonstrating strong tenant relationships and asset quality.
Increased Funds from Operations
Funds from operation per unit increased to $0.47, up 9.3% year-over-year, driven by strong operating performance and reduced G&A expenses.
High Retail Occupancy
Committed retail occupancy remains high at 98.2%, despite a slight decrease from the previous quarter.
Successful Capital Recycling Strategy
Year-to-date closed dispositions totaled $230.4 million, consistent with IFRS values and at a weighted average cap rate of 4.3%.
Balance Sheet Improvements
Adjusted debt to adjusted EBITDA improved to 8.88x, with ample liquidity at $1.3 billion.
NCIB Program Success
Acquired and canceled 2.3 million units at an average price of $17.25 per unit, with total units acquired and canceled reaching 5.6 million year-to-date.
Negative Updates
Slight Decrease in Retail Occupancy
The committed retail occupancy decreased slightly from 98.7% to 98.2% due to the closure of 3 HBC locations.
Challenges with HBC Joint Venture
RioCan decided not to participate financially in 5 of the 12 assets in the HBC joint venture, indicating challenges and financial decisions impacting certain assets.
Higher Interest Expenses
The positives in FFO growth were partially offset by higher interest expenses.
Company Guidance
During the RioCan Real Estate Investment Trust Second Quarter 2025 Conference Call, several key metrics and guidance were provided. Jonathan Gitlin, the President and CEO, highlighted an impressive new leasing spread of 51.5% and blended leasing spreads of 20.6% for the quarter. Additionally, RioCan executed 1.3 million square feet of leases, with 1.2 million being renewals, contributing to a same-property NOI growth of 4% after adjustments. The committed retail occupancy rate remained strong at 98.2%, reflecting a slight decrease from the previous quarter due to the closure of three HBC locations. Financially, the funds from operations per unit increased by 9.3% year-over-year to $0.47, driven by strong operating performance and reduced G&A expenses. The company also reported an adjusted debt to adjusted EBITDA ratio of 8.88x, with a liquidity position of $1.3 billion. RioCan anticipates repatriating $1.3 to $1.4 billion in capital over 2025 and 2026, primarily from the sale of RioCan Living assets and condominium transactions. The net asset value per unit at the end of the quarter was $24.89, with an emphasis on a significant gap between this value and the current unit price, indicating undervaluation.

RioCan Real Estate Investment Financial Statement Overview

Summary
RioCan Real Estate Investment demonstrates stable revenue growth and a strong operational cash flow, yet faces challenges with declining net profitability and free cash flow. The balance sheet is solid with a moderate debt-to-equity ratio, although high debt levels require careful management. Overall, the company shows resilience but needs to address profitability pressures and liquidity challenges to sustain its financial health.
Income Statement
72
Positive
The company demonstrates stable revenue growth, with a 4.9% increase from 2023 to 2024. The gross profit margin for TTM is 59.7%, which is consistent with previous periods, reflecting stable cost management. However, the net profit margin for TTM has decreased significantly to 20.0% from 36.6% in 2024, indicating pressure on net profitability. EBIT and EBITDA margins are relatively strong at 55.4% and 39.7% respectively, but the decline in EBITDA compared to 2024 suggests potential efficiency issues.
Balance Sheet
68
Positive
The balance sheet shows a stable equity base with a debt-to-equity ratio of 1.02, indicating moderate leverage. Return on equity for TTM is 3.6%, which is a decline from previous years, reflecting lower profitability. The equity ratio is 47.8%, suggesting a solid financial structure. However, high debt levels could pose a risk if not managed properly, especially in a rising interest rate environment.
Cash Flow
75
Positive
The company shows a decrease in free cash flow for TTM. Free cash flow to net income ratio is 0.54, indicating that only a portion of net income is being converted into free cash flow. The operating cash flow to net income ratio is higher at 1.40, reflecting strong operational cash generation. Nevertheless, the decline in free cash flow growth rate highlights potential challenges in maintaining liquidity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.38B1.29B1.16B1.21B1.18B1.14B
Gross Profit781.12M831.61M714.41M700.49M689.86M670.09M
EBITDA553.70M731.66M237.02M674.08M675.34M652.50M
Net Income283.96M473.46M38.80M236.77M598.39M-64.78M
Balance Sheet
Total Assets15.38B15.47B14.84B15.10B15.18B15.27B
Cash, Cash Equivalents and Short-Term Investments72.32M190.24M128.44M86.23M77.76M238.46M
Total Debt7.46B7.35B6.90B6.78B6.71B6.97B
Total Liabilities8.04B7.91B7.40B7.37B7.27B7.53B
Stockholders Equity7.34B7.56B7.44B7.73B7.91B7.73B
Cash Flow
Free Cash Flow220.06M81.34M-5.48M113.15M26.52M35.95M
Operating Cash Flow487.81M378.28M385.52M506.12M490.40M552.58M
Investing Cash Flow-286.57M-360.77M-200.15M-79.69M94.39M-469.34M
Financing Cash Flow-179.70M48.49M-147.37M-417.97M-745.49M61.69M

RioCan Real Estate Investment Technical Analysis

Technical Analysis Sentiment
Positive
Last Price18.90
Price Trends
50DMA
18.12
Positive
100DMA
17.62
Positive
200DMA
17.49
Positive
Market Momentum
MACD
0.22
Positive
RSI
61.36
Neutral
STOCH
6.42
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:REI.UN, the sentiment is Positive. The current price of 18.9 is above the 20-day moving average (MA) of 18.71, above the 50-day MA of 18.12, and above the 200-day MA of 17.49, indicating a bullish trend. The MACD of 0.22 indicates Positive momentum. The RSI at 61.36 is Neutral, neither overbought nor oversold. The STOCH value of 6.42 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:REI.UN.

RioCan Real Estate Investment Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
C$3.86B8.7116.70%5.95%4.26%72.02%
77
Outperform
C$462.72M13.304.63%6.68%5.14%209.83%
75
Outperform
$5.55B19.843.81%6.04%17.42%377.43%
75
Outperform
C$1.63B26.203.12%5.62%23.01%-50.29%
73
Outperform
C$4.15B15.906.53%4.66%2.53%
72
Outperform
C$4.52B20.544.43%6.98%7.01%-15.80%
65
Neutral
$2.17B12.193.79%4.94%3.15%1.96%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:REI.UN
RioCan Real Estate Investment
18.90
-0.28
-1.48%
TSE:CRT.UN
CT Real Estate Investment
16.18
1.14
7.58%
TSE:FCR.UN
First Capital Realty
19.62
1.88
10.60%
TSE:PLZ.UN
Plaza Retail REIT
4.16
0.57
15.88%
TSE:SRU.UN
SmartCentres Real Estate Investment Trust
26.58
1.76
7.09%
TSE:PMZ.UN
Primaris Real Estate Investment Trust
15.19
-0.35
-2.25%

RioCan Real Estate Investment Corporate Events

Business Operations and StrategyFinancial Disclosures
RioCan Reports Robust Q2 2025 Results with Strong Leasing Performance
Positive
Aug 7, 2025

RioCan Real Estate Investment Trust reported strong financial results for the second quarter of 2025, with a notable 9.3% increase in FFO per unit. The company achieved impressive leasing spreads and high tenant retention, underscoring its operational excellence and strategic focus on capital recycling. These results highlight RioCan’s robust portfolio and financial flexibility, reinforcing its market position and ability to drive sustained growth.

The most recent analyst rating on ($TSE:REI.UN) stock is a Hold with a C$20.25 price target. To see the full list of analyst forecasts on RioCan Real Estate Investment stock, see the TSE:REI.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