Kimco Earnings: Ratings Upgraded Along With Accretive Acquisition of High-Quality Asset

Third-quarter results for Kimco Realty were slightly better than we anticipated, leading us to reaffirm our $25.50 fair value estimate for the no-moat company. Same-store occupancy increased 20 basis points sequentially to 96.4%, which matches the company’s all-time high for occupancy and was better than our 96.0% estimate. Re-leasing spreads were 12.3%, slightly better than our 11.2% estimate. Kimco reported that minimum rent was up 3.7% and same-store revenue was up 3.3%. Same-store expenses grew a similar 3.5%, so same-store net operating income was also up 3.3%, slightly better than the 3.0% we expected for the quarter. The company reported funds from operations of $0.43 per share for the third quarter, which was $0.02 better than our $0.41 estimate and $0.03 higher than the $0.40 the company reported in the third quarter of 2023.