Kimco Realty Earnings: Strong Re-Leasing Spreads Drive Growth of Minimum Rents and NOI

Kimco Realty's first-quarter results were slightly better than we anticipated, leading us to reaffirm our $25.50 fair value estimate for the no-moat company. Same-store occupancy improved 20 basis points year over year to 96.0%, slightly better than our 95.8% estimate. Re-leasing spreads remained in the double digits at 10.2% in the first quarter, matching our assumption. As a result, minimum rent for the same-store portfolio increased 2.8% and same-store revenue was up 2.3%. Meanwhile, operating expenses fell 1.4%, leading to same-store net operating income growth of 3.9%, above our 2.9% estimate for the first quarter. Kimco reported funds from operations of $0.39 per share, $0.03 better than our $0.36 estimate.