Kennedy Wilson: Zacks’ Bull of the Day Play

Kennedy-Wilson (KWSnapshot Report) is the best treat for you to put into your plastic jack-o-lantern today.  This Real Estate Operations Company is going to scare up a positive earnings spike as they build up to and announce their third quarter earnings on November 5th.

 

During Q2 2014 Kennedy-Wilson finalized their IPO in London (KWE LN), which enables it to broaden their investments in Europe.  Kennedy-Wilson (KWSnapshot Report) owns a 13.2% stake in the spinoff.

Acquisitions

Between late March and July of this year, Kennedy-Wilson spent the entire $1.7 billion in proceeds from the KWE LN IPO, and purchased real estate related investments throughout Europe.  Further, the European spinoff has been looking into further acquisition opportunities in Italy, Spain, and Portugal.

Also, Kennedy-Wilson recently purchased a 312 unit apartment community, adding to their growing presence in Denver.  In total, Kennedy-Wilson global multifamily portfolio now totals 19,683 units including 732 units in greater Denver Colorado.

Overall Portfolio

According to the company as of yesterday, Kennedy-Wilson’s real estate related acquisitions by the company and its equity partner’s year-to-date total more than $2.6 billion, which includes just under $2 billion acquired by Kennedy Wilson Europe Real Estate plc.

Looking Towards Earnings on November 5th

This quarter will be the first quarter that will include impact from the operations in Europe by KWE London.  And Zacks models are expecting Kennedy-Wilson to post solid earnings beat of 35.0%

Kennedy-Wilson has beat the Zacks Consensus Earnings Estimates in the last 7 consecutive quarters, the average earnings beat for the last 4 quarters is an astounding 269.23%.   The table below shows its price and subsequent positive surprise price jumps.

Further, the company has been solidly beating the Zacks Consensus Revenue Estimates 5 out of the last 6 quarters with an average beat of 53.75%.  Moreover, the one day price impact by the positive earnings surprise has seen the stock jump 5% in Q1, and 6.14% in Q2.

Estimates Increasing

Over the past 30 days the earnings estimates for Q3 and FY 2014 have been rising.  With Q3 earnings estimate increasing from -$0.22 to -$0.20, and FY 2014 going from -$0.09 to $0.09.  Now when you combine increasing earnings estimates with a solid history of positive earnings surprises, Kennedy-Wilson is poised for another strong earnings announcement.

Bottom Line

Kennedy-Wilson, which holds a Zack Rank #1 (Strong Buy) has a strong portfolio of real estate properties, a solid position in the KWE IPO, 5 consecutive quarters of increasing Return on Equity, Return on Assets, and Return on Total Capital to name a few of the positive tailwinds behind Kennedy-Wilson.  This stock should see a nice price appreciation up through their earnings announcement on November 5th.

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