Eastgroup Properties (EGP) AI Stock Analysis

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Eastgroup Properties

(NYSE:EGP)

69Neutral

Eastgroup Properties presents a solid financial foundation with a strong balance sheet and steady revenue growth. While technical indicators are neutral, valuation metrics suggest the stock may be overvalued. The earnings call provided reassurance on strategic focus, but highlighted some regional challenges and occupancy decreases, tempering the overall outlook.

Positive Factors

Earnings Guidance

EGP increased 2025 FFO/share guidance by a penny to $8.91/share, indicating confidence in future earnings.

Leasing Performance

Leasing remained strong with 2.6 million square feet signed during the first quarter, which is a 4% increase compared to the previous year.

Negative Factors

Leasing Spreads

Concerns include EGP's steep drop in leasing spreads in SoCal, and more modest development starts and capital raising.

Macro Uncertainty

Decision-making is expected to slow due to elevated macro uncertainty.

Eastgroup Properties (EGP) vs. S&P 500 (SPY)

Market Cap

$8.68B

Dividend Yield3.31%

Average Volume (3M)542.20K

Price to Earnings (P/E)36.4

Beta (1Y)0.74

Revenue Growth11.92%

EPS Growth-0.83%

CountryUS

Employees101

SectorReal Estate

Sector Strength81

IndustryREIT - Industrial

Share Statistics

EPS (TTM)1.14

Shares Outstanding52,515,950

10 Day Avg. Volume461,397

30 Day Avg. Volume542,203

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.23

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit22.87

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$184.38

Price Target Upside10.40% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering14

Eastgroup Properties Business Overview & Revenue Model

Company DescriptionEastGroup Properties, Inc. (EGP) is a real estate investment trust (REIT) focused on the development, acquisition, and operation of industrial properties in major Sunbelt markets throughout the United States. The company's core business is centered on owning, managing, and leasing multi-tenant business distribution spaces, which are strategically located near major transportation hubs and in proximity to large population centers.

How the Company Makes MoneyEastGroup Properties generates revenue primarily through rental income from its portfolio of industrial properties. The company leases space to a diversified tenant base across various industries, including e-commerce, logistics, and manufacturing. Key revenue streams include long-term lease agreements and renewals, which provide a stable and predictable cash flow. Additionally, EastGroup Properties invests in developing new properties and acquiring existing ones to expand its portfolio and increase rental income potential. The company's earnings are further supported by its strategic focus on high-demand regions, enabling it to capitalize on favorable market conditions and maintain high occupancy rates.

Eastgroup Properties Financial Statement Overview

Summary

Eastgroup Properties demonstrates a strong financial position with robust revenue growth and margins. The balance sheet is particularly strong with no debt and a healthy equity ratio. Cash flows are solid but show some volatility in investing activities.

Income Statement

―

Eastgroup Properties demonstrates strong revenue growth with a notable increase in total revenue from $487.0M in 2022 to $488.5M in TTM (Trailing-Twelve-Months), indicating a positive growth trend. The gross profit margin remains robust at 63.8% in TTM, coupled with an impressive EBITDA margin of 115.8%. However, the net profit margin improved significantly to 34.6% in TTM, showing effective cost management and profitability improvement.

Balance Sheet

The balance sheet is exceptionally strong, reflected by a debt-free position in TTM, which significantly reduces financial risk. The equity ratio stands at a healthy 65.5%, indicating a strong equity base. The return on equity is impressive at 5.1%, showcasing effective utilization of shareholder funds to generate profits.

Cash Flow

―

The cash flow position is solid with a high operating cash flow to net income ratio of 2.56 in TTM, suggesting strong cash generation relative to net income. Free cash flow also shows positive growth, increasing to $413.4M in TTM. However, fluctuations in cash flow from investing activities could suggest potential volatility in capital investments.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
640.23M	570.59M	487.02M	409.48M	363.02M
	Gross Profit
466.02M	416.56M	353.11M	294.40M	259.65M
	EBIT
255.21M	228.14M	183.77M	151.72M	129.17M
	EBITDA
444.62M	399.22M	337.41M	278.82M	245.53M
	Net Income Common Stockholders
227.75M	200.49M	186.18M	123.78M	73.49M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.53M	40.26M	56.00K	4.39M	21.00K
	Total Assets
5.08B	4.52B	4.04B	3.22B	2.72B
	Total Debt
1.55B	1.70B	1.88B	1.48B	1.32B
	Net Debt
1.53B	1.66B	1.88B	1.47B	1.32B
	Total Liabilities
1.78B	1.91B	2.08B	1.64B	1.45B
	Stockholders Equity
3.29B	2.61B	1.95B	1.57B	1.27B
Cash Flow		Free Cash Flow
416.59M	338.20M	275.65M	223.19M	163.15M
	Operating Cash Flow
416.59M	338.20M	316.50M	256.49M	196.28M
	Investing Cash Flow
-724.34M	-570.06M	-521.15M	-529.26M	-288.26M
	Financing Cash Flow
285.02M	272.06M	200.31M	277.14M	91.77M

Eastgroup Properties Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price167.01

Price Trends

50DMA

169.33

Negative

100DMA

168.12

Negative

200DMA

172.40

Negative

Market Momentum

MACD

-0.06

Negative

RSI

54.87

Neutral

STOCH

72.01

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGP, the sentiment is Neutral. The current price of 167.01 is above the 20-day moving average (MA) of 161.29, below the 50-day MA of 169.33, and below the 200-day MA of 172.40, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 54.87 is Neutral, neither overbought nor oversold. The STOCH value of 72.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EGP.

Eastgroup Properties Risk Analysis

Eastgroup Properties disclosed 31 risk factors in its most recent earnings report. Eastgroup Properties reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Eastgroup Properties Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STAG	73 Outperform	$6.33B	25.43	7.15%	4.43%	8.81%	33.30%
FR	70 Outperform	$6.63B	24.23	10.18%	3.20%	9.18%	-7.05%
REXR	69 Neutral	$8.12B	27.87	3.35%	4.99%	18.02%	12.12%
EGP	69 Neutral	$8.68B	36.45	7.61%	3.31%	11.92%	-0.83%
TRNO	66 Neutral	$5.81B	29.68	5.33%	3.41%	22.17%	4.34%
LXP	64 Neutral	$2.36B	41.19	2.98%	6.64%	5.68%	358.78%
Sector *	60 Neutral	$2.81B	11.31	0.21%	8508.38%	6.19%	-15.39%

* Real Estate Sector Average

Performance Comparison

EGP

Eastgroup Properties

167.01

7.05

4.41%

STAG

Stag Industrial

33.86

-0.34

-0.99%

TRNO

Terreno Realty

56.45

3.09

5.79%

First Industrial Realty

49.41

2.72

5.83%

LXP

LXP Industrial Trust

8.09

-0.18

-2.18%

REXR

Rexford Industrial Realty

33.85

-9.69

-22.26%

Eastgroup Properties Earnings Call Summary

Earnings Call Date:Apr 23, 2025

(Q1-2025)

% Change Since: 4.08%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong financial performance, with significant growth in FFO and leasing metrics. However, challenges such as decreased occupancy, market uncertainties, and regional difficulties in Southern California were noted. The company remains optimistic with a strategic focus on leasing and financial flexibility.

Q1-2025 Updates

Positive Updates

Record FFO Growth

Funds from operations (FFO) excluding involuntary conversions were $2.12 per share, up 7.1% year-over-year, continuing a decade-long trend of growth.

Strong Leasing Performance

Quarter-end leasing was at 97.3% with occupancy at 96.5%, and average quarterly occupancy was 95.8%. Quarterly releasing spreads were 47% GAAP and 31% cash.

Diversified Rent Roll

The top ten tenants now account for just 7.1% of rents, down 70 basis points from the previous year, indicating more diversified income sources.

Refinancing Savings

The company refinanced a $100 million unsecured term loan, reducing the credit spread by 30 basis points, resulting in $1.5 million in savings over five years.

Positive Development Yield

Development yields were strong, with a notable 9% yield on recent completions.

Negative Updates

Decrease in Average Occupancy

Average quarterly occupancy decreased by 170 basis points from the first quarter of 2024, from 97.5% to 95.8%.

Challenges in Southern California

Negative absorption in Los Angeles with nine consecutive quarters of negative net absorption, impacting leasing spreads.

Development Start Delays

Development starts were reduced by $50 million and delayed due to economic uncertainty, reducing capital proceeds by $190 million.

Tariff and Market Uncertainty

Tariff discussions and economic uncertainties are causing delays in leasing decisions, particularly in Los Angeles.

Company Guidance

In the first quarter of 2025, EastGroup Properties reported a robust performance, with funds from operations (FFO) excluding involuntary conversions reaching $2.12 per share, marking a 7.1% increase over the previous year. The company maintained a strong leasing momentum with a quarter-end leasing rate of 97.3% and an occupancy rate of 96.5%, though the average quarterly occupancy of 95.8% was down 170 basis points from Q1 2024. Releasing spreads were 47% on a GAAP basis and 31% in cash, while cash same-store NOI grew by 5.2% despite lower occupancy. The top ten tenants accounted for only 7.1% of rents, indicating a diversified rent roll. The company remains cautious about new investments, projecting $250 million in development starts for the year, mainly in the second half, due to economic uncertainties such as ongoing tariff discussions. EastGroup's strong balance sheet, with a debt-to-total market capitalization ratio of 13.7% and an interest coverage ratio of 15 times, positions it well for potential opportunistic investments.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.