General Growth Properties Hits 52-Week High: Is it a Buy?

Loading...
Loading...

Shares of General Growth Properties Inc. GGP scaled a new 52-week high of $26.67 on Nov 25. The stock closed at $26.59, reflecting a solid year-to-date return of 35.3%. The trading volume for the session was over 4.5 million shares.

This retail real estate investment trust (“REIT”), which came up with encouraging results in the third quarter, is poised well to benefit from this year's busiest shopping season, backed by an improving economy and consequent positive sentiments. The company's efforts to drive more customers to its malls are encouraging.

Therefore, despite scaling such high, we believe that with a long-term growth rate of 9.10%, this Zacks Rank #2 (Buy) stock can prove to be a good choice, given the improving retail market fundamentals.

Growth Drivers

The U.S. have started celebrating its annual shopping spree and shoppers are expected to spend more this time. According to a forecast by the National Retail Federation (“NRF”), holiday sales (November and December) will see a solid 4.1% jump to $616.9 billion. The NRF prediction is higher than both last year's growth of 3.1% and the 10-year average sales increase of 2.9%.

As per Shop.org, online sales too are projected to increase 8–11% to around $105 billion for this holiday season. These projections tag along big promises for the retailers, thanks to a fall in unemployment rate, gain in consumer confidence and falling oil price that are leaving people with more disposable income.

Amid this, with an ultimate aim of increasing traffic at the malls and seeking higher demand for space, General Growth Properties is embracing the omni-channel concept – right through collaboration for availing digital coupon facilities across its properties as well as same-day delivery services. We believe such measures have better placed this company to leverage the busiest shopping season of the year.

The company also came up with encouraging results in third-quarter 2014. It reported an earnings surprise of 3.13% on an increase in initial rental rates and rise in same-store net operating income.

Over the last 30 days, the Zacks Consensus Estimate for both 2014 and 2015 remained unchanged at $1.32 and $1.44 per share, respectively.

Other REITs Scaling Highs

Other REITs that have also scaled 52-week highs this week include Equity Residential EQR, Health Care REIT Inc. HCN and Ventas, Inc. VTR.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report


VENTAS INC VTR: Free Stock Analysis Report

EQUITY RESIDENT EQR: Free Stock Analysis Report

HEALTH CR REIT HCN: Free Stock Analysis Report

GENL GRWTH PPTY GGP: Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research
Loading...
Loading...
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...