FRT – Market expectations are for Uniform ROA to improve, but management may have concerns about bankruptcies, growth, and their developments

• Federal Realty Investment Trust (FRT:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 41.6x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about store bankruptcies, growth, and their developments
  
  

• Specifically, management may lack confidence in their ability to sustain growth in annual retail and office lease payments, property operating income, and incremental equity. Moreover, they may have concerns about G&A expense run rate increases, the timing of their large development completions, and unanticipated store bankruptcies, namely Fairway. Furthermore, they may lack confidence in their ability to replace closed stores with better tenants and maintain strong retail traffic, sales, and occupancy rates. Also, they may be exaggerating the long-term value of their new investments, grocery demand near their Georgetown Shopping Center property, and the value of the lifestyle portion of the Darien property