What's in Store for Federal Realty Stock in Q1 Earnings Season?

Company Overview - Federal Realty Investment Trust (FRT) is a leading real estate investment trust (REIT) focused on retail properties, set to report its first-quarter 2025 results on May 8, after market close [1] - In the last reported quarter, FRT met the Zacks Consensus Estimate for FFO of $1.73 per share, reflecting healthy leasing activity and significant occupancy gains [2] U.S. Retail Real Estate Market - The U.S. shopping center market experienced a pullback in net absorption in Q1 2025, with a total decline of 5.9 million square feet, marking the largest single-quarter decline since Q3 2020 [4] - The national vacancy rate increased by 20 basis points to 5.5% year over year, remaining near historical lows, with minimal new construction [3][5] - Asking rents for U.S. shopping centers grew by 2.3% year over year to $24.76 per square foot in Q1 2025 [5] Factors Influencing FRT's Performance - FRT is likely to benefit from its premium retail assets located in affluent communities, particularly in major coastal markets [6] - A well-located portfolio with 80% of its centers having a grocery component is expected to aid stable revenue generation [7] - The focus on developing urban mixed-use assets is anticipated to contribute positively to revenue growth [7] Projections for FRT - FRT's leasing rate is estimated at 95.7%, down 50 basis points sequentially, while rent per square foot is projected to grow by 1.9% year over year [8] - The Zacks Consensus Estimate for quarterly revenues is $306.93 million, indicating a 5.4% increase from the year-ago period [8] - Rental income from minimum rents is projected at $207.76 million, up from $192.94 million in the prior year [9] Analyst Sentiment - The Zacks Consensus Estimate for FRT's first-quarter FFO per share has been revised downward to $1.69, suggesting a 3.1% year-over-year increase [10] - FRT currently has an Earnings ESP of -0.82% and a Zacks Rank of 4 (Sell), indicating a lack of confidence among analysts [11]