With a market cap of $9.5 billion, Federal Realty Investment Trust (FRT) is a REIT specializing in retail and mixed-use properties across major U.S. metropolitan markets. The Rockville, Maryland-based company focuses on high-demand, densely populated communities, offering a mix of shopping, dining, living, and working spaces.
Companies valued at less than $10 billion or more are generally considered “mid-cap” stocks and Federal Realty fits this criterion perfectly. Federal Realty is renowned for its portfolio of 102 properties with 3,400 tenants, 27 million square feet of commercial space, and 3,100 residential units strategically located in high-demand markets, along with the longest annual dividend increase record among U.S. REITs.
However, the REIT is down 3.4% from its 52-week high of $118.34, achieved on Sep. 16. Shares of FRT have risen 14% over the past three months, outperforming the broader Nasdaq Composite's ($NASX) 1.5% gain over the same time frame.
Nevertheless, longer term, FRT is up nearly 11% on a YTD basis, lagging behind NASX's 20.7% return. Also, shares of Federal Realty have increased 26.5% over the past 52 weeks, compared to NASX's 38.4% return over the same time frame.
Yet, FRT has maintained its position above the 50-day moving average since November last year and has stayed above the 200-day moving average since December last year, with some fluctuations.
Federal Realty has underperformed over the past year primarily due to rising interest rates, which have increased borrowing costs and negatively impacted REIT valuations. Additionally, concerns about economic uncertainty and shifting consumer preferences have led to slower leasing activity and reduced foot traffic in retail properties, further affecting FRT's performance. Moreover, despite reporting better-than-expected Q2 FFO of $1.69 per share and revenue of $296.1 million on Aug. 1, the stock fell marginally the next day primarily due to rising operating expenses, which came in at $191.3 million—an increase from both the previous quarter and the same period last year.
In comparison, rival Simon Property Group, Inc. (SPG) has outpaced FRT, delivering a 17.6% return YTD and a significant 55% surge over the past 52 weeks.
Despite FRT’s weak price action over the past year, analysts remain moderately optimistic about its prospects. Among the 16 analysts covering the stock, there is a consensus rating of “Moderate Buy,” and it is currently trading below the mean price target of $123.03.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
