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Choice Properties Real Estate Investment Trust (TSE:CHP.UN)
TSX:CHP.UN
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Choice Properties Real Estate Investment
(TSX:CHP.UN)
Select Model
Select Model
Rating:55Neutral
Price Target:
C$15.00
▲(1.90% Upside)
The overall stock score reflects a mixed outlook. The earnings call provided positive insights with strong occupancy and leasing metrics, which are significant strengths. However, financial performance is hindered by declining revenue and high leverage, and technical indicators show a lack of momentum. The negative P/E ratio further underscores profitability challenges, though the high dividend yield offers some compensation.
Positive Factors
High Occupancy Rates
High occupancy rates reflect strong demand and effective asset management, ensuring stable rental income and financial resilience.
Leasing Spreads
Strong leasing spreads indicate high-quality assets and pricing power, enhancing long-term revenue potential and competitive positioning.
Industrial Portfolio Performance
The robust performance of the industrial portfolio underscores strategic market positioning and growth in a key sector, supporting revenue stability.
Negative Factors
High Leverage
High leverage can limit financial flexibility and increase risk, especially in volatile markets, potentially impacting long-term stability.
Declining Revenue Growth
Declining revenue growth signals potential challenges in maintaining market share and profitability, necessitating strategic adjustments.
Profitability Challenges
Operational challenges impacting profitability may hinder reinvestment and growth, requiring strategic focus to improve efficiency and margins.
Choice Properties Real Estate Investment (CHP.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$10.57B
Dividend Yield5.36%
Average Volume (3M)446.44K
Price to Earnings (P/E)19.7
Beta (1Y)0.69
Revenue Growth1.46%
EPS Growth-118.83%
CountryCA
Employees285
SectorReal Estate
Sector Strength53
IndustryREIT - Retail
Share Statistics
EPS (TTM)-0.21
Shares Outstanding328,024,260
10 Day Avg. Volume537,705
30 Day Avg. Volume446,442
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.66
Enterprise Value/Revenue12.70
Enterprise Value/Gross Profit17.70
Enterprise Value/Ebitda37.57
Forecast
1Y Price Target
$15.87Price Target Upside7.84% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Choice Properties Real Estate Investment Business Overview & Revenue Model
Company DescriptionChoice Properties, Canada's preeminent diversified real estate investment trust, is the owner, manager and developer of a high-quality portfolio comprising 725 properties totaling 66.1 million square feet of gross leasable area. Choice Properties owns a portfolio comprised of retail properties predominantly leased to necessity-based tenants; industrial, office and residential assets concentrated in attractive markets; and offers an impressive and substantial development pipeline. Choice Properties' strategic alliance with its principal tenant, Loblaw Companies Limited, the country's leading retailer, is a key competitive advantage providing long-term growth opportunities.
How the Company Makes MoneyChoice Properties generates revenue primarily through leasing its retail, industrial, and office spaces to tenants. The company earns rental income from long-term leases, which are typically structured to provide stable cash flows. A significant portion of its revenue is derived from its partnership with Loblaw Companies Limited, as many of its properties are leased to Loblaw stores, ensuring consistent occupancy and rental income. Additionally, the company may engage in property development and redevelopment projects, which can enhance the value of its portfolio and create new revenue streams. Other income can be generated from property management services and ancillary services related to its properties.
Choice Properties Real Estate Investment Earnings Call Summary
Earnings Call Date:Jul 18, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance in the second quarter, with significant achievements in occupancy, leasing spreads, and successful capital transactions. Despite some challenges in the residential market and strategic lease terminations, the overall outlook remains positive.Q2-2025 Updates
Positive Updates
Near Full Occupancy
Achieved a near full occupancy rate of 97.8%, indicating strong demand for their assets.
FFO Per Unit Growth
Delivered a 3.9% growth in FFO per unit, showcasing solid financial performance.
Exceptional Leasing Spreads
Achieved exceptional leasing spreads of 24%, highlighting the quality of their assets.
Strong Industrial Portfolio Performance
Industrial portfolio occupancy increased by 30 basis points to 98% with strong leasing spreads.
Capital Recycling Program Success
Completed approximately $427 million in total real estate transactions, enhancing portfolio quality.
Loblaw Lease Renewals
Renewed 39 Loblaw locations totaling 2.5 million square feet at an 8.6% increase over expiring rents.
Negative Updates
Residential Market Softening
Observed some softening in residential markets as new supply comes online.
Strategic Lease Terminations Impacting Retention
Tenant retention impacted by strategic lease terminations, decreasing overall retention rate.
Company Guidance
During the Choice Properties Real Estate Investment Trust's Q2 2025 earnings call, several key metrics were highlighted to illustrate the company's strong performance and strategic direction. The company maintained near full occupancy levels at 97.8%, driven by robust demand for grocery-anchored retail and industrial assets. It achieved a 3.9% growth in funds from operations (FFO) per unit and exceptional leasing spreads of 24%, reflecting the high quality of its assets. The industrial portfolio saw occupancy increase by 30 basis points to 98%, and the company executed approximately $427 million in total real estate transactions, enhancing its portfolio quality. Additionally, the company completed 321,000 square feet of new leasing and achieved strong renewal spreads, with retail lease renewal spreads averaging 13.2% above expiring rents and industrial lease rate renewals averaging 38.9% above expiry. Same-Asset Net Operating Income (NOI) grew by 1.4%, and the company's IFRS Net Asset Value (NAV) increased by 1.5% to $14.38 per unit. These metrics underscore Choice Properties' resilience and strategic execution in a stable yet uncertain macroeconomic environment.Choice Properties Real Estate Investment Financial Statement Overview
Summary
Choice Properties faces challenges with declining revenue and profitability in the TTM period. Strong gross margins and cash flow generation are positive, but high leverage and negative profitability metrics pose significant risks.Income Statement
The income statement shows a concerning trend with declining revenue growth and negative net profit margin in the TTM period. The gross profit margin remains strong, indicating effective cost management. However, the negative EBIT margin in the TTM suggests operational challenges.45
Neutral
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio, indicating significant leverage, which poses a risk. The equity ratio is stable, but the negative return on equity in the TTM highlights profitability issues. Overall, the balance sheet shows moderate stability with potential risks due to high leverage.55
Neutral
Cash Flow
Cash flow analysis reveals a positive free cash flow growth rate in the TTM, indicating improved cash generation. The operating cash flow to net income ratio is healthy, suggesting efficient cash conversion. However, reliance on free cash flow to net income remains high, indicating potential cash flow volatility.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.38B | 1.37B | 1.43B | 1.26B | 1.29B | 1.27B |
| Gross Profit | 991.90M | 978.57M | 1.04B | 900.64M | 912.01M | 886.60M |
| EBITDA | 467.26M | 1.37B | 1.14B | 1.28B | 956.90M | 981.61M |
| Net Income | -121.55M | 784.44M | 796.69M | 744.25M | 23.01M | 450.69M |
Balance Sheet | ||||||
| Total Assets | 17.72B | 17.56B | 17.31B | 16.82B | 16.17B | 15.65B |
| Cash, Cash Equivalents and Short-Term Investments | 25.36M | 63.39M | 252.42M | 64.74M | 84.30M | 207.22M |
| Total Debt | 6.82B | 6.68B | 6.70B | 6.55B | 6.23B | 6.49B |
| Total Liabilities | 13.20B | 12.66B | 12.94B | 13.00B | 12.86B | 12.12B |
| Stockholders Equity | 4.52B | 4.90B | 4.37B | 3.82B | 3.31B | 3.51B |
Cash Flow | ||||||
| Free Cash Flow | 726.49M | 724.73M | 641.97M | 1.01B | 773.41M | 507.76M |
| Operating Cash Flow | 726.49M | 724.73M | 641.97M | 633.15M | 669.43M | 621.18M |
| Investing Cash Flow | -716.84M | -584.21M | -361.35M | -616.73M | -64.12M | 155.19M |
| Financing Cash Flow | -603.88M | -329.56M | -92.94M | -35.99M | -728.22M | -611.15M |
Choice Properties Real Estate Investment Technical Analysis
Positive
14.72
Price Trends
14.53
Positive
14.52
Positive
13.91
Positive
Market Momentum
<0.01
Positive
51.16
Neutral
41.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CHP.UN, the sentiment is Positive. The current price of 14.72 is below the 20-day moving average (MA) of 14.87, above the 50-day MA of 14.53, and above the 200-day MA of 13.91, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 51.16 is Neutral, neither overbought nor oversold. The STOCH value of 41.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CHP.UN.
Choice Properties Real Estate Investment Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | C$3.90B | 8.75 | 16.70% | 5.90% | 4.26% | 72.02% | |
75 Outperform | C$5.59B | 19.96 | 3.87% | 6.02% | 17.42% | 377.43% | |
75 Outperform | C$1.64B | 26.34 | 3.12% | 5.60% | 23.01% | -50.29% | |
73 Outperform | C$4.22B | 16.08 | 6.53% | 4.59% | 2.53% | ― | |
72 Outperform | C$4.57B | 20.72 | 4.43% | 6.91% | 7.01% | -15.80% | |
55 Neutral | $10.57B | 19.74 | -2.85% | 5.36% | 1.46% | -118.83% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% |
* Real Estate Sector Average
TSE:CHP.UN
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.