Market News

Morguard Posts Excellent Q2 Results, but Stock Slips

Story Highlights

MRC stock closed 0.5% lower on Wednesday, even though the real estate company reported excellent second-quarter results.

Canadian real estate firm Morguard Corp. (TSE: MRC) has reported excellent results for the second quarter of 2022. However, following the results on Wednesday, shares of the company slipped around 0.5% to close at C$112.86.

A Snapshot of MRC’s Q2 Results

Normalized funds from operations (FFO) increased 26.7% year-over-year to C$4.72 per share. Net income jumped to C$248.1 million from C$16.2 million in the same period last year.

Revenue from hotel properties rose 51.1% to C$45.5 million and revenue from real estate properties grew 7.3% to C$224 million.

Net operating income surged 5.3% to C$141.7 million, driven by higher occupancy at multi-suite residential properties and a rise in average market rent.

The Ontario-based company ended the quarter with C$12.1 billion of assets.

Further, Morguard’s Board of Directors announced a dividend of 15 cents per share for the third quarter. The amount will be payable on September 29 to shareholders of record on September 15.

MRC Stock Has 40% Upside Potential

On July 27, Jimmy Shan of RBC Capital maintained a Hold rating on the stock with a price target of C$165 (46.2% upside potential).

On TipRanks, Morguard has a Moderate Buy consensus rating based on one Buy and one Hold. MRC’s average price target of C$157.32 implies 39.4% upside potential to current levels.

Insiders Are Buying MRC Stock

TipRanks’ Insider Trading Activity tool shows that Insider Confidence Signal is currently Positive on Morguard, with corporate insiders buying MRC shares worth C$297,700 in the last three months.

The most recent informative purchase worth C$360,000 was made by the company’s Non-Executive Director Bruce Keith Robertson.

Concluding Thoughts

Real estate investment trust (REIT) Morguard owns almost 190 hotel, residential, office, retail, and industrial properties. These include 3,944 hotel rooms, commercial leasable space of around 16.9 million square feet, and 17,460 residential suites. These assets were worth $19.4 billion as of August 3.

MRC stock, which has lost almost 17% so far this year, should receive a boost in the near term as COVID-19 restrictions are lifted, and property and travel demand have picked up.

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