Canada's Flagship Communities REIT Q1 rental revenue rises on acquisitions, rent increases

Overview

• Canada manufactured housing REIT's Q1 rental revenue rose 21% yr/yr, driven by acquisitions and rent hikes

• Net income for Q1 more than doubled yr/yr due to fair value adjustments

• Company acquired 96-lot Ohio community, boosting presence in key market

Outlook

• Flagship says rising home ownership costs and limited supply support positive MHC industry outlook

• Company sees increasing household formations and declining single-family residential homeownership rates as industry tailwinds

• Flagship maintains a positive outlook for the MHC industry, citing historical outperformance

Result Drivers

• ACQUISITIONS AND RENT INCREASES - Co said Q1 revenue growth was driven by acquisitions and higher lot rents across its portfolio

• SAME COMMUNITY GROWTH - Co said higher same community revenue reflected increased monthly lot rent, ancillary revenues, and occupancy

• LOWER NOI MARGINS - Co said NOI margins declined due to a greater share of lower-margin amenity fees and seasonal weather impacts

Company press release: ID:nGNX6kMbgP

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the residential reits peer group is "buy"

• Wall Street's median 12-month price target for Flagship Communities Real Estate Investment Trust is $24.00, about 26.3% above its May 1 closing price of $19.00

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 15 three months ago

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