Published on 16 Sep 2022 on Zacks via Yahoo Finance
Store Capital (STOR) Moves 19.9% Higher: Will This Strength Last?
STORE Capital STOR shares soared 19.9% in the last trading session to close at $32.12. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5.7% loss over the past four weeks.The increased optimism stems from the recently announced deal, wherein STORE Capital will be acquired by GIC, a global institutional investor, and Oak Street, a division of Blue Owl, in an all-cash transaction valued at around $14 billion.The transaction is expected to close in first-quarter 2023, subject to the approval of STORE Capital’s shareholders and certain other customary conditions.Per the agreement, STOR’s shareholders will receive $32.25 per share in cash, reflecting a premium of 20.4% to the company’s closing price as of Sep 14, 2022.This retail real estate investment trust is expected to post quarterly funds from operations (FFO) of $0.56 per share in its upcoming report, which represents a year-over-year change of +12%. Revenues are expected to be $215.15 million, up 16.9% from the year-ago quarter.While FFO and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in FFO estimate revisions and near-term stock price movements. However, as STOR rallied to end the last trading session at $32.12, a little lower than what GIC and Oak Street have offered, there is a marginal upside in the stock.For Store Capital, the consensus FFO per share estimate for the quarter has been revised 1.4% higher over the last 30 days to the current level. And a positive trend in FFO estimate revision usually translates into price appreciation.The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>Store Capital is part of the Zacks REIT and Equity Trust - Retail industry. Urban Edge Properties (UE), another stock in the same industry, closed the last trading session 1.4% lower at $15.28. UE has returned -9.2% in the past month.For Urban Edge Properties, the consensus FFO per share estimate for the upcoming report has changed +1.7% over the past month to $0.30. This represents a change of +7.1% from what the company reported a year ago. Urban Edge Properties currently has a Zacks Rank of #3 (Hold).
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 STORE Capital Corporation (STOR) : Free Stock Analysis Report Urban Edge Properties (UE) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research