What's in the Cards for Invitation Homes This Earnings Season?

Invitation Homes INVH is slated to report third-quarter 2024 results on Oct. 30, after the market close. In anticipation of the announcement, industry analysts and investors are eager to assess the company's performance and prospects in the current economic climate.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.In the last reported quarter, this residential real estate investment trust (REIT) posted a core FFO per share of 47 cents, meeting the Zacks Consensus Estimate. Results reflected a rise in total revenues and same-store blended rent. However, a rise in interest expense undermined the results to some extent.In the preceding four quarters, INVH’s core FFO, per share, met the Zacks Consensus Estimate twice, surpassed once and missed in the other period, with the average miss being 0.01%. The graph below depicts this surprising history:Invitation Home Price and EPS Surprise Invitation Home price-eps-surprise | Invitation Home QuoteU.S. Apartment Market in Q3Per RealPage data, the U.S. apartment demand remained impressive in the third quarter of 2024 despite a record number of new deliveries entering the market. As a result, rent growth stayed relatively subdued across the nation, continuing the trend observed over the past several months.Between July and September 2024, the U.S. apartment market absorbed 192,649 market-rate units, while 162,595 new units were delivered during the same period. Annual supply hit 557,842 units, the highest since 1974, while demand trailed slightly at 488,773 units.In the quarter under discussion, nationwide, occupancy in market-rate apartments was 94.4%, a slight decline of just 10 basis points compared to last year. Rents rose 0.2% year over year in September, and the monthly effective rent change was down 0.5%. The average effective rent was $1,838.Factors at Play for Invitation HomesINVH is poised to benefit from its strategically located diverse portfolio in infill locations of high-growth markets across the Western United States, Sunbelt locations and Florida.INVH’s high-margin and growing third-party management business has been a significant growth driver for its third-quarter revenues. The company’s homebuilder-relationship approach to build-to-rent accrues high investment yields through value addition with minimal capital investment.During the period July – August, INVH witnessed the same store renewal lease rate growth of 4.4% versus 5.6% in 2Q24, indicating sustained strength through the late summer season. New lease rate growth of 1.9% was down from 3.6% in 2Q24. Growth peaked in May and June 2024, following typical seasonal trends. Blended lease rate growth was 3.7%, down from 5.0% in 2Q24. The average occupancy of 97.1%, compared with 97.5% in 2Q24, was in line with seasonal move-out expectations.Projections for Invitation HomesFor the third quarter, the Zacks Consensus Estimate for INVH’s rental revenues currently stands at $644 million, implying a growth of 16% from the prior-year period’s reported figure.The Zacks Consensus Estimate for third-quarter total revenues is pegged at $659.5 million, indicating a rise of 6.8% from the year-ago reported number.Invitation Homes’ activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share remained unchanged at 46 cents over the past three months. The figure suggests a 4.6% increase year over year.What Our Quantitative Model Predicts for Invitation HomesOur proven model does not conclusively predict a surprise in terms of FFO per share for INVH this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.Invitation Homes currently has an Earnings ESP of 0.00% and carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Stocks That Warrant a LookHere are two stocks from the residential REIT sector — AvalonBay Communities AVB and Independence Realty Trust IRT — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.AvalonBay Communities, scheduled to report quarterly numbers on Nov. 4, has an Earnings ESP of +0.72% and carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.Independence Realty Trust is slated to report quarterly numbers on Oct. 30. IRT has an Earnings ESP of 1.94% and carries a Zacks Rank of 2 at present.Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AvalonBay Communities, Inc. (AVB): Free Stock Analysis Report Independence Realty Trust, Inc. (IRT): Free Stock Analysis Report Invitation Home (INVH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks