Postal Realty Gains On Solid 4Q Beat

Shares of Postal Realty Trust were up 2.4% in Tuesday’s extended trading session after the real estate investment trust (REIT) reported 4Q results that exceeded analysts’ expectations.

Postal Realty’s (PSTL) 4Q funds from operations (FFO) jumped over four fold to $0.26 per share from $0.06 reported in the year-ago quarter and topped Street estimates of $0.22. Moreover, adjusted funds from operations (AFFO) increased 64.7% to $0.28 per share year-on-year.

Postal Realty’s revenues of $7.58 million marked a year-over-year improvement of 96.4%. Moreover, revenues came in well ahead of consensus estimates of $6.21 million.

Acquisitions of postal properties were the main drivers of Postal Realty’s overall fourth-quarter results. The company acquired 36 postal properties in 4Q for $62.6 million, while it bought a total of 261 postal properties during the year for approximately $130 million.

The company said that from the beginning of 1Q till March 15, it has acquired 49 postal properties for a total consideration of approximately $24.2 million. (See Postal Realty Trust stock analysis on TipRanks)

Postal Realty CEO Andrew Spodek said, “I am pleased to report that Postal Realty Trust delivered strong financial and operational results in a challenging environment. Our Company meaningfully expanded its platform through the completion of over $130 million in accretive property acquisitions during 2020, within the USPS logistics network, including industrial, flex and last mile facilities.”

Following the earnings announcement, BMO Capital analyst Frank Lee reiterated a Buy rating on PSTL.

In a note to investors, Lee said, “PSTL is executing on multiple fronts, highlighted by $130mm of acquisitions in FY20 along with addressing all of its 2019/2020 holdover leases, which are now under new 5-year leases. 2021 is off to a good start with $24mm acquired YTD, well on its way to meet $100mm target for FY21. The roll-up story remains intact and we see a path for above-average growth and multiple expansion as further progress is made on the external side.”

Lee has a price target of $19 (20.6% upside potential) on the stock.

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