Gaming and Leisure Properties' (GLPI) Q4 Earnings Preview

Gaming and Leisure Properties, Inc. GLPI is slated to report fourth-quarter and full-year 2019 results on Feb 20, after the closing bell. While the company’s performance is likely to reflect a year-over-year increase in funds from operations (FFO) per share, revenues might display a decline.

In the last reported quarter, this Wyomissing, PA-based first gaming-focused real estate investment trust (REIT) delivered a positive surprise of 2.35% in terms of funds from operations (FFO) per share. Results reflected year-over-year improvement in revenues.

Gaming and Leisure Properties has a mixed surprise history for the preceding four quarters, having beaten estimates on two occasions for as many in-line performances, the average positive beat being 0.88%. The graph below depicts this surprise history:

Gaming and Leisure Properties, Inc. Price and EPS Surprise

Gaming and Leisure Properties, Inc. price-eps-surprise | Gaming and Leisure Properties, Inc. Quote

Let’s see how things are shaping up for this announcement.

Factors at Play

Gaming and Leisure Properties has achieved diversification across states/licensing jurisdictions, which is likely to have helped the company generate stable cash flow in the quarter under consideration. Also, Penn National Gaming, Boyd Gaming and Eldorado Resorts are reputed and experienced operators in regional gaming, and are anticipated to have been conducive to the company’s top-line growth.

Gaming and Leisure Properties aims at pursuing portfolio-enhancing accretive transactions, in a bid to position the company well for growth. Moreover, its quarterly results will likely reflect escalator realizations and the interest-rate savings from refinancing.

Additionally, the state and local governments’ heavy dependency on gaming tax revenues to support their budgets, signals brighter days ahead for Gaming and Leisure Properties.

Also, the company has a staggered debt maturity profile, ample liquidity, strong governance and demonstrated access to capital markets, which are anticipated to have continued in the quarter under review.

However, the company projects fourth-quarter revenues of $288.2 million, down nearly 5% from the prior-year quarter, and adjusted FFO per share of 87 cents, indicating a 3.6% rise year on year.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $287.9 million — indicating a year-over-year decline of nearly 5.1%. Moreover, the company’s activities during the to-be-reported quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for fourth-quarter 2019 FFO per share remained unchanged at 87 cents, over the past month. Nevertheless, the figure indicates a year-over-year increase of 3.6%.

For full-year 2019, the company has guided for revenues of $1,152.7 million, up 9.2% from the prior-year quarter, and adjusted FFO per share of $3.44, indicating an 8.2% rise year on year.

The Zacks Consensus Estimate for 2019 FFO per share of $3.44 indicates an 8.2% year-over-year jump on revenues of $1.15 billion.

Here is what our quantitative model predicts:

Our proven model does not conclusively predict a positive surprise in terms of FFO per share for Gaming and Leisure Properties this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Gaming and Leisure Properties carries a Zacks Rank of 3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks That Warrant a Look

Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:

Ventas, Inc. VTR, slated to report fourth-quarter results on Feb 20, has an Earnings ESP of +0.81% and holds a Zacks Rank of 3, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Jernigan Capital, Inc. JCAP, scheduled to release earnings on Feb 26, has an Earnings ESP of +4.35% and currently carries a Zacks Rank of 3.

Urstadt Biddle Properties Inc. UBA, expected to release quarterly numbers around Mar 13, has an Earnings ESP of +1.41% and carries a Zacks Rank of 3, currently.

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