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Kimco Realty Corp KIM

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Improving Retail Environment Allows Kimco to Collect Previously Owed Rent and Post Strong Q2 Results

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

Kimco Realty's second-quarter results were in line with our expectations, leading us to reaffirm our $21 fair value estimate for the no-moat company. Same-store occupancy improved 60 basis points sequentially to 94.1%, though that is still 150 basis points below the second quarter of 2020. Re-leasing spreads continue to hold up well with Kimco reporting 9.2% higher rents on leases to new tenants and 4.7% higher rents on lease renewals for a blended total company spread of 5.9%, which was in line with our estimate. Kimco benefited from tenants paying previously owed rent in the second quarter, providing a short-term boost to revenue. As a result, same-store revenue increased 14.5% year over year, though same-store revenue fell 1.8% when excluding the rent from prior quarters. For similar reasons, same-store net operating income was up 16.7% in the second quarter but fell 5.8% when excluding the rent from prior quarters, which is in line with our estimate of a 6.2% decline. The higher revenue caused Kimco to report funds from operations of $0.34 in the second quarter, which was in line with our estimate and is 10 cents higher than the second quarter of 2020.

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Company Profile

Business Description

One of the oldest real estate investment trusts in the United States, Kimco Realty owns interests in 399 shopping centers throughout major markets in the U.S., representing roughly 56 million square feet.

Contact
500 North Broadway, Suite 201
Jericho, NY, 11753
T +1 516 869-9000
Sector Real Estate
Industry REIT - Retail
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Hard Assets
Employees 484

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