Can EPR Properties (EPR) Earnings Pull a Surprise in Q1? - Analyst Blog

EPR Properties EPR is slated to report first-quarter 2015 results on Apr 28, after the closing bell.

This retail real estate investment trust (“REIT”) has beaten the Zacks Consensus Estimate in 3 of the trailing 4 quarters with an average beat of 4.17%. The Zacks Consensus Estimate for first-quarter has remained unchanged at $1.01 per share over the last 7 days.

Is the company poised for a winning quarter? Let’s see how things are shaping up prior to this announcement.

Factors to Consider

EPR Properties is a specialty REIT that focuses on investments in properties across three primary market segments – Entertainment, Recreation and Education. The company has a diversified tenant base that is expected to aid its growth as well as drive first-quarter results.

But taking into account a sluggish economic recovery in the first quarter and disappointing financial data, we believe that the pace of entertainment and recreation activities would somewhat be limited.

Also, combined percentage rents and participating interests are usually much lower in the first half of the year as against the latter half. As a result, EPR Properties expects income from these sources to scale about $250,000 in Q1, at par with the prior-year quarter level. Moreover, general and administrative expense is generally elevated in the first quarter.  The company also anticipates recording additional current tax reserve of approximate $1.5 million.

Earnings Whispers

Our proven model does not conclusively show that EPR Properties will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Zacks ESP:  Both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.01 per share. Hence, the difference is 0.00%.

Zacks Rank: EPR Properties has a Zacks Rank #3 (Hold). This, when combined with an Earnings ESP of 0.00%, makes surprise prediction difficult.

Notably, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some stocks in the REIT industry that you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

Chesapeake Lodging Trust CHSP carries a Zacks Rank #2 and has an Earnings ESP of +4.17%. It is scheduled to report results on Apr 30.

Public Storage PSA has an Earnings ESP of +1.03% and a Zacks Rank #3. The company is slated to release results on Apr 30.

Kilroy Realty Corp. KRC carries a Zacks Rank #2 and has an Earnings ESP of +3.23%. It is scheduled to report results on Apr 29.
 

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