RioCan Real Estate Investment (REI.UN) AI Stock Analysis

• Market Cap: $5.45B
• Dividend Yield: 6.21%
• Average Volume (3M): 741.17K
• Price to Earnings (P/E): 84.5
• Beta (1Y): 0.56
• Revenue Growth: 22.22%
• EPS Growth: -71.38%
• Country: CA
• Employees: 496
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Retail
• EPS (TTM): -0.41
• Shares Outstanding: 294,519,620
• 10 Day Avg. Volume: 874,936
• 30 Day Avg. Volume: 741,170
• PEG Ratio: 0.01
• Price to Book (P/B): 0.73
• Price to Sales (P/S): 4.25
• P/FCF Ratio: 67.52
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $20.50
• Price Target Upside: 10.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.07
• Revenue Forecast (FY): $1.19B

• Rating: 62 Neutral
• Price Target: C$19.50 ▲(5.29% Upside)

The overall stock score of 62 reflects moderate financial performance with stable revenue growth but declining profit margins. The earnings call provided positive operational insights, offset by valuation concerns. Technical indicators suggest a neutral market stance, while the high P/E ratio indicates overvaluation despite a strong dividend yield.

Positive Factors

High Occupancy Rates

High occupancy rates indicate strong demand for RioCan's properties, ensuring stable rental income and supporting long-term revenue growth.

Successful Capital Repatriation

Effective capital repatriation enhances financial flexibility, allowing RioCan to reinvest in high-value assets and optimize its portfolio for future growth.

Positive GRESB Assessment

Strong GRESB rankings reflect RioCan's commitment to sustainability and operational excellence, enhancing its reputation and competitive positioning.

Negative Factors

Declining Profit Margins

Declining profit margins can impact RioCan's profitability, reducing its ability to reinvest in growth and potentially affecting shareholder returns.

Valuation Losses

Significant valuation losses on investment properties can erode asset value and negatively impact financial stability and investor confidence.

Challenges with HBC Partnership

Challenges with the HBC partnership highlight risks in joint ventures, potentially affecting future earnings and strategic partnerships.

RioCan Real Estate Investment Business Overview & Revenue Model

Company Description

RioCan 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 Money

RioCan generates revenue primarily through leasing its retail, commercial, and residential properties to a variety of tenants. The company earns rental income from long-term leases with retailers, which typically include provisions for rent escalations and additional charges related to maintenance and property taxes. In addition to rental income, RioCan may also earn revenue from property management services and development projects, including joint ventures and partnerships with other developers. The company’s strategic focus on urban centers and growing markets also positions it to benefit from increasing demand for retail and mixed-use spaces, further bolstering its revenue streams.

RioCan Real Estate Investment Financial Statement Overview

Summary

RioCan shows moderate financial health with stable revenue growth and manageable leverage. However, declining profit margins and reduced return on equity highlight areas for improvement. The company demonstrates positive cash flow trends, but further enhancement in cash flow management could strengthen its financial position.

Income Statement

The income statement shows moderate growth with a 6% revenue increase in the TTM period. However, margins have declined compared to previous years, with the gross profit margin dropping from 64.32% in 2024 to 56.85% in the TTM. The net profit margin also decreased significantly from 36.62% in 2024 to 20.67% in the TTM. Despite these declines, the company maintains a positive EBIT margin of 40.20%.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.02 in the TTM, indicating manageable leverage. The return on equity has decreased to 3.82% in the TTM from 6.26% in 2024, suggesting reduced profitability. However, the equity ratio remains healthy, supporting the company's stability.

Cash Flow

Cash flow analysis reveals a positive trend with a 12.16% growth in free cash flow in the TTM. The operating cash flow to net income ratio is 0.41, indicating efficient cash generation relative to net income. However, the free cash flow to net income ratio of 0.45 suggests room for improvement in cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.46B	1.29B	1.16B	1.21B	1.18B	1.14B
Gross Profit	795.70M	831.61M	714.41M	700.49M	689.86M	670.09M
EBITDA	527.26M	731.66M	237.02M	674.08M	675.34M	652.50M
Net Income	66.77M	473.46M	38.80M	236.77M	598.39M	-64.78M
Balance Sheet
Total Assets	14.98B	15.47B	14.84B	15.10B	15.18B	15.27B
Cash, Cash Equivalents and Short-Term Investments	102.68M	190.24M	128.44M	86.23M	77.76M	238.46M
Total Debt	7.30B	7.35B	6.90B	6.78B	6.71B	6.97B
Total Liabilities	7.85B	7.91B	7.40B	7.37B	7.27B	7.53B
Stockholders Equity	7.14B	7.56B	7.44B	7.73B	7.91B	7.73B
Cash Flow
Free Cash Flow	246.82M	81.34M	-5.48M	113.15M	26.52M	35.95M
Operating Cash Flow	467.21M	378.28M	385.52M	506.12M	490.40M	552.58M
Investing Cash Flow	-160.56M	-360.77M	-200.15M	-79.69M	94.39M	-469.34M
Financing Cash Flow	-254.08M	48.49M	-147.37M	-417.97M	-745.49M	61.69M

RioCan Real Estate Investment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 18.52
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 18.52 is above the 20-day moving average (MA) of 18.48, below the 50-day MA of 18.65, and above the 200-day MA of 17.62, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 49.80 is Neutral, neither overbought nor oversold. The STOCH value of 79.17 is Neutral, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRT.UN	82 Outperform	C$3.91B	8.39	11.49%	5.74%	4.11%	35.99%
PLZ.UN	76 Outperform	C$471.56M	12.26	7.14%	6.56%	4.53%	197.86%
PMZ.UN	76 Outperform	C$1.84B	13.01	6.52%	5.52%	26.88%	77.26%
SRU.UN	68 Neutral	C$4.37B	17.47	5.03%	7.22%	0.48%	96.32%
FCR.UN	68 Neutral	C$4.00B	16.24	6.18%	4.71%	-0.83%	-28.93%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
REI.UN	62 Neutral	$5.45B	84.49	0.92%	6.21%	22.22%	-71.38%

RioCan Real Estate Investment Corporate Events

RioCan Appoints PwC as New Auditor for 2026

RioCan Real Estate Investment Trust has announced a change in its external auditor for fiscal 2026, appointing PricewaterhouseCoopers LLP (PwC) following a comprehensive request for proposal process. This decision aligns with RioCan’s commitment to strong governance and oversight, as PwC was selected for its expertise, qualifications, and independence. Ernst & Young LLP (EY), the outgoing auditor, will continue its role through the end of 2025, concluding nearly two decades of service. This strategic move is expected to enhance RioCan’s financial oversight and maintain stakeholder confidence.

RioCan Reveals Strategic Growth Plans at 2025 Investor Day

RioCan Real Estate Investment Trust announced its strategic outlook at the 2025 Investor Day, focusing on a simplified, retail-focused strategy backed by a productive, necessity-based portfolio. The company aims for a long-term Core FFO per unit growth of 5%, with a 3.5% outlook for 2026-2028, driven by disciplined capital recycling of $1.3 – $1.4 billion. This approach enhances financial flexibility and fuels growth, positioning RioCan to deliver durable growth and create lasting value for its unitholders.

RioCan Reports Strong Q3 Results with Robust Leasing Performance

RioCan Real Estate Investment Trust reported strong third-quarter results, showcasing a 4.6% growth in Commercial Same Property NOI and a retail occupancy rate of 98.4%. The company achieved significant leasing spreads, reflecting robust demand and effective leasing strategies. Despite a net loss per unit due to valuation losses, RioCan’s operational strength and strategic focus on core retail assets position it well for future growth. The company’s solid balance sheet, marked by substantial liquidity and unencumbered assets, provides flexibility for capital allocation and continued investment in its retail portfolio.

RioCan Completes $200 Million Debenture Issuance

RioCan Real Estate Investment Trust has successfully completed the issuance of $200 million in Series AP senior unsecured debentures, which carry a 4.417% coupon rate and mature in 2032. The funds raised will be used to repay existing debt and support general business purposes, with the debentures receiving a BBB credit rating from Morningstar DBRS, reflecting stable financial positioning.

RioCan Announces $200 Million Debenture Offering to Strengthen Financial Position

RioCan Real Estate Investment Trust has announced the issuance of $200 million in Series AP senior unsecured debentures, set to mature on October 1, 2032, with a 4.417% annual coupon. The proceeds will be used to repay existing debt and for general business purposes. This strategic financial move, facilitated by a syndicate of major capital markets, aims to strengthen RioCan’s financial position and operational flexibility, potentially impacting its market standing and stakeholder interests.