Cousins Properties Reports 4Q Beat, JP Morgan Remains Neutral

JP Morgan has published a research report on Cousins Properties CUZ after the company's land gains aided a 4Q beat. In the report, JP Morgan writes "CUZ reported 4Q FFO ex items that was $0.03 ahead of our estimate and $0.04 ahead of Bloomberg consensus. Unconsolidated land gains beat our estimate by $0.03, putting the core business pretty much in line with expectations. On the positive side, NOI was higher than we expected, leasing costs were lower, the Terminus 100 mortgage was refinanced, and the company made progress on monetizing non-core assets including land. On the negative side, higher G&A partially offset the NOI beat, there was no pick-up in occupancy from 3Q, and further impairment charges prompt us to revisit land values/NAV. We expect a modest positive reaction in the stock given Street estimates that were a bit lower than ours, but we continue to believe the two more important intermediate-term drivers to this story are 1) fundamental momentum in its core Atlanta leasing market, and 2) finding attractive investments to grow the scale of the company to better fit the G&A load." JP Morgan maintains its Neutral rating and $8 price target. Cousins Properties closed yesterday at $8.67.