Kimco Realty Earnings: Higher Occupancy and Re-Leasing Spreads Drive Beat Versus Expectations

Kimco Realty reported second-quarter results that were slightly better than our expectations, giving us confidence in our $25.50 fair value estimate for the no-moat company. Same-store occupancy sequentially improved 20 basis points to 96.2%, slightly better than our 96.0% estimate, and re-leasing spreads were 11.7% for the quarter, slightly better than our estimate of new rent terms being 10.2% higher than expiring rent. Minimum rents and same-store revenue both increased by 3.1%, while same-store operating expenses were up 3.3%, leading to same-store net operating income growth of 3.0% for the second quarter. Kimco reported funds from operations of $0.41 per share for the quarter, a penny better than our $0.40 estimate and two cents better than the $0.39 figure the company reported in the second quarter of 2023.