Zacks_Analysts' Blog : National Retail Confirms Guidance - Analyst Blog

National Retail Properties, Inc. (NNN), a publicly owned equity real estate investment trust (REIT), has recently reiterated its fiscal 2011 FFO (fund from operations) guidance at $1.54 to $1.56 per share based on the solid performance of its operating property portfolio, strong balance sheet, and accretive effect from property acquisitions.

Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. The FFO guidance equates to net earnings (before any gains or losses from the sale of real estate) of $0.94 to $0.96 per share plus $0.60 of expected real estate depreciation and amortization.

For fiscal 2012, National Retail also reaffirmed its FFO guidance of $1.62 to $1.67 per share, which equates to net earnings (before any gains or losses from the sale of real estate) of $1.04 to $1.09 plus $0.58 of expected real estate related depreciation and amortization.

The FFO guidance for both fiscal 2011 and 2012 included the effect of the just-concluded secondary offering of approximately 8.1 million shares at $25.75 each. The company presently expects total investment for new property acquisitions to surpass $700 million in 2011.

National Retail invests primarily in high-quality properties subject to long-term net leases. As of September 30, 2011, the company owned 1,298 investment properties in 47 states with a gross leasable area of approximately 15.3 million square feet.

We maintain our long-term ‘Neutral’ recommendation on National Retail, which currently retains a Zacks #2 Rank that translates into a short-term ‘Buy’ rating. We also have a ‘Neutral’ recommendation and a Zacks #3 Rank (short-term ‘Hold’ rating) for DDR Corp. (DDR), one of the competitors of National Retail.