Will Boston Properties (BXP) Surprise This Earnings Season? - Analyst Blog

Boston Properties Inc. BXP is set to report its first-quarter 2014 results on Apr 29, after the closing bell. In the prior quarter, it delivered a positive earnings surprise of 4.03%. Also, the company has posted an average positive earnings surprise of 1.19% over the past four quarters, beating the Zacks Consensus Estimate in 3 of the last 4 quarters.

Let's see how things are shaping up for this announcement.

Factors to Consider

Improved core operating fundamentals, the ongoing successful portfolio repositioning activities and a decent balance sheet place Boston Properties on the growth trajectory. Despite short-term headwinds, the company's key market, Boston, is still among the most prominent office markets in the U.S. This market is growing and offers sufficient scope to the company to enhance its top line.

However, according to a recent report by CBRE Group, Inc. CBG, the Washington, D.C. office market – one of Boston Properties' key markets – experienced a rise in vacancy rate (up 30 bps) for the second consecutive quarter. Moreover, overall, though the office market is recovering in the U.S., the rate of revival is tepid. In fact, the demand for office space remains modest due to adequate space availability, which consequently restricts any robust turnover in rent and occupancies.

Earnings Whispers

Our proven model does not conclusively shows that Boston Properties is likely to beat the Zacks Consensus Estimate in the upcoming quarter.

To beat the estimate, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, #2 or #3. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Zacks ESP: The Earnings ESP for Boston Properties is 0.00%.  This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.23 per share.

Zacks Rank: Boston Properties' Zacks Rank #3 (Hold) increases the predictive power of ESP. Nevertheless, we need to have a positive ESP as well to be confident about an earnings surprise call.

Other Stocks to Consider

Here are some other REITs you may want to consider on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter:

Public Storage PSA, with an Earnings ESP of +0.54% and a Zacks Rank #3. The company is slated to report its first-quarter 2014 results on May 1.

Kimco Realty Corp. KIM, with an Earnings ESP of +2.94% and a Zacks Rank #3. The company will report its first-quarter 2014 results on May 7.