The Zacks REIT and Equity Trust – Retail industry is witnessing growth driven by increased demand for necessity-based shopping, benefiting properties anchored by grocery stores, discount retailers, and healthcare providers. In the first half of 2023, this sector saw a 20.1% increase compared to the S&P 500’s 10.9% rise and the broader Finance sector’s 7.1%. The industry is currently ranked #95 out of 247 Zacks industries, placing it in the top 38%.
Phillips Edison & Company (PECO), Tanger Inc. (SKT), and American Assets Trust, Inc. (AAT) are noted as potential beneficiaries of the sector’s favorable trends. PECO operates 326 grocery-anchored centers, reporting a 97% occupancy rate. Tanger manages 38 outlet centers with nearly 97% occupancy as well, while AAT’s diversified portfolio spans 31 properties with significant demographic advantages. Analysts predict increases in funds from operations (FFO) per share for these companies, with PECO and Tanger projecting growth rates of 6.15% and 6.44% year-over-year, respectively.
Key factors shaping the future of the industry include limited new construction, which supports existing properties, and shifting consumer spending patterns towards essential and value-based retail. Despite this, economic uncertainties may create disparities in performance across the sector, especially for businesses reliant on discretionary spending.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
