Federal Realty Investment Trust: A Look at Recent Performance and Outlook

With a market cap of $9.4 billion, Federal Realty Investment Trust (FRT) specializes in owning, operating, and redeveloping premium retail properties mainly along the U.S. coasts. Based in Rockville, Maryland, the company targets affluent communities where demand for retail is strong.

Relative Performance Against Market and Sector

Over the last 52 weeks, FRT has seen its shares lag behind the broader market. While its stock has increased 22.5%, the S&P 500 Index ($SPX) has outpaced this with a 30.1% rise. Year-to-date, FRT has gained 9.8%, falling short when compared to the SPX’s nearly 24.1% increase.

When analyzing its performance against the Real Estate Select Sector SPDR Fund (XLRE), FRT stands out positively. The trust has outperformed XLRE’s 19.9% gains over the past year and its 8.5% year-to-date returns.

Mixed Earnings Report and Analyst Ratings

On October 30, following a mixed Q3 earnings report, FRT’s shares dropped 3%. The company posted an FFO of $1.71 per share—an annual increase of 3.6%—but this slightly missed Wall Street’s estimate of $1.72. The shortfall can be linked to rising property-level expenses and lower-than-expected term fees. In contrast, FRT’s revenue rose by 5.9% year-over-year to $303.6 million, exceeding consensus estimates of $301.2 million.

As for the current fiscal year concluding in December, analysts project a 3.8% increase in FFO year-over-year, expecting it to reach $6.80. Historically, FRT has shown a mixed surprise performance, beating or meeting consensus estimates twice in the last four quarters while falling short on two occasions.

Currently, 16 analysts oversee FRT, and the average consensus rating has shifted to a “Moderate Buy.” This consensus includes 10 “Strong Buy” ratings, one “Moderate Buy,” and five “Hold” recommendations. Notably, this evaluation is slightly more optimistic than three months ago, with nine analysts now recommending a “Strong Buy.”

Future Outlook and Price Targets

On September 16, Evercore ISI adjusted its price target for FRT to $123, maintaining an “Outperform” rating. This suggests an 8.7% upside from current levels. The average price target of $123.67 indicates a potential premium of 9.3%, while the highest projected target of $135 suggests an upward potential of 19.3%.

On the date of publication, Neharika Jain did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The information included in this article is for informational purposes only. For further details, please refer to the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author alone and do not necessarily reflect those of Nasdaq, Inc.