Breaking Down Phillips Edison & Company, Inc. (PECO) Financial Health: Key Insights for Investors

Are you looking to understand the financial stability and growth potential of Phillips Edison & Company Inc. (PECO)? Let's delve into the key financial insights from 2024, revealing critical data points for investors. Did you know that PECO's revenue reached $661.39 million in 2024, marking an 8.40% increase? Furthermore, Core Funds From Operations (FFO) saw a rise of 6.8%, reaching $331.8 million, or $2.43 per diluted share. How did same-center Net Operating Income (NOI) increase by 3.8% to $430.4 million? And what about the fact that the leased portfolio occupancy remained strong at 97.7%? Keep reading to explore a detailed breakdown of PECO's financial health and discover what these figures mean for your investment decisions.

Phillips Edison & Company, Inc. (PECO) Revenue Analysis

Phillips Edison & Company, Inc. (PECO) is a fully integrated, internally-managed real estate investment trust (REIT) that focuses on acquiring and managing grocery-anchored shopping centers. Understanding their revenue streams involves examining the sources, growth, and segment contributions that drive their financial performance.

PECO primarily generates revenue through:

• Rental Income: The bulk of PECO's revenue comes from leasing retail spaces within its shopping centers to a diverse range of tenants, with a significant portion derived from grocery store anchors.
• Management and Other Fees: PECO also earns fees from managing properties and providing other services related to real estate operations.

Analyzing PECO's revenue involves looking at historical trends and the contributions from different business segments. For instance, changes in occupancy rates, rental rates, and the composition of tenants can significantly impact revenue.

Year-over-year revenue growth is a critical metric. While specific percentage increases or decreases require up-to-date financial reports, monitoring this growth helps investors understand PECO's ability to expand its income. Factors influencing this growth include:

• Acquisitions and Dispositions: Buying new properties or selling existing ones can significantly alter revenue.
• Lease Renewals and New Leases: The terms and rates of renewed and new leases directly affect rental income.
• Economic Conditions: Broader economic trends and consumer spending habits impact the performance of tenants and, consequently, PECO's rental income.

To provide a clearer picture, a sample table illustrating potential revenue contributions from different segments is shown below. Note that the figures are hypothetical and for illustrative purposes only.

Significant changes in revenue streams often warrant closer inspection. For example, a decrease in rental income from a specific region might indicate economic challenges in that area, while an increase in management fees could reflect the expansion of PECO's service offerings.

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Phillips Edison & Company, Inc. (PECO) Profitability Metrics

Understanding Phillips Edison & Company, Inc. (PECO)'s profitability is crucial for investors. Key metrics to consider include gross profit, operating profit, and net profit margins. These figures, along with trends and comparisons to industry averages, offer insights into the company's financial health and operational efficiency.

For the year ended December 31, 2024, Phillips Edison & Company, Inc. (PECO) reported a net income attributable to stockholders of $62.7 million, or $0.51 per diluted share. This compares to $56.8 million, or $0.48 per diluted share, for the year ended December 31, 2023.

Here's a breakdown of PECO's Funds From Operations (FFO) for 2024:

• Nareit FFO: $323.8 million, or $2.37 per diluted share, an increase of 8.1% compared to 2023.
• Core FFO: $331.8 million, or $2.43 per diluted share, an increase of 6.8% compared to 2023.

Additional key highlights for the year ended December 31, 2024, include:

• Same-center Net Operating Income (NOI) increased 3.8%.
• Leased portfolio occupancy remained strong at 97.7%.
• The Company acquired 14 shopping centers and 4 land parcels for a total of $305.7 million.

Here is a summary of PECO's profitability ratios:

• Gross Profit Margin: 70.55% for the most recently reported fiscal quarter, ending 2024-12-31.
• As of December 31, 2024, the Company's net debt to annualized adjusted EBITDAre was 5.0x.

A comparison of profitability ratios with industry averages reveals how Phillips Edison & Company, Inc. (PECO) performs relative to its peers. For instance, one source indicates the following:

• Return on Assets: Company Performance - 5.7%, Industry Average - 4.9%
• Return on Equity: Company Performance - 8.3%, Industry Average - 7.6%

These figures suggest that Phillips Edison & Company, Inc. (PECO) generally exhibits superior financial performance compared to industry benchmarks.

Operational efficiency is evident in Phillips Edison & Company, Inc. (PECO)'s cost management and gross margin trends. For example, one source notes a 3.2% year-over-year improvement in operational efficiency. Furthermore, the company's gross margin trends indicate stable revenue generation.

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Phillips Edison & Company, Inc. (PECO) Debt vs. Equity Structure

Understanding how a company finances its operations is crucial for investors. This section breaks down Phillips Edison & Company, Inc. (PECO)'s debt and equity structure, providing insights into its financial strategy and risk profile. Here's a detailed look:

Debt Overview:

As of December 31, 2024:

• Total Long-Term Debt: $1.38 billion
• Short-Term Debt: $225 million
• Total Debt: $1.605 billion

Debt-to-Equity Ratio:

As of Q4 2023, PECO's debt-to-equity ratio was reported as 1.42. However, more recent data indicates a ratio of 0.80 as of a recent period. Analyst perspectives suggest that PECO's debt-to-equity ratio is below the industry average, reflecting a lower dependency on debt financing and a more conservative financial approach.

Recent Debt Activities:

• In September 2024, Phillips Edison & Company, Inc. announced the pricing of $350 million aggregate principal amount of 4.950% senior unsecured notes due 2035.
• Also in January 2025, PECO amended its revolving credit facility, increasing the size to $1.0 billion (from $800 million) and extending the maturity date to January 9, 2029.

Credit Ratings:

PECO has received upgrades from both S&P Global Ratings and Moody's in 2024:

• S&P upgraded its issuer credit rating for PECO to 'BBB' from 'BBB-' with a stable outlook in August 2024.
• Moody's upgraded its issuer credit rating for PECO to 'Baa2' from 'Baa3' with a stable outlook in September 2024.

Equity Funding:

During the year ended December 31, 2024, PECO generated net proceeds of $73.8 million after commissions through the issuance of 1.9 million common shares at a gross weighted average price of $39.18 per common share through PECO's ATM programs.

Capital Structure Breakdown:

Based on available data, a capital structure breakdown can be estimated as:

• Debt Financing Percentage: Approximately 58.7%
• Equity Financing Percentage: Approximately 41.3%

Additional Insights:

As of December 31, 2024, PECO's outstanding debt had a weighted-average interest rate of 4.3% and a weighted-average maturity of 5.8 years when including all extension options, and 93.0% of PECO's total debt was fixed-rate debt.

For more insights into Phillips Edison & Company, Inc. (PECO)'s financial health, check out Breaking Down Phillips Edison & Company, Inc. (PECO) Financial Health: Key Insights for Investors.

Phillips Edison & Company, Inc. (PECO) Liquidity and Solvency

Liquidity and solvency are vital indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Phillips Edison & Company, Inc. (PECO), a thorough examination of these metrics provides critical insights for investors.

Assessing Phillips Edison & Company, Inc. (PECO)'s Liquidity:

Analyzing PECO's liquidity involves scrutinizing key ratios and cash flow trends to gauge its ability to cover its immediate liabilities.

• Current and Quick Ratios: These ratios offer a snapshot of PECO's ability to pay off its short-term liabilities with its current assets. The current ratio, calculated as current assets divided by current liabilities, indicates the extent to which PECO's current assets can cover its short-term obligations. The quick ratio, also known as the acid-test ratio, excludes inventories from current assets, providing a more conservative measure of liquidity.
• Analysis of Working Capital Trends: Monitoring the trend of PECO's working capital—the difference between its current assets and current liabilities—reveals insights into its operational efficiency and short-term financial health. A positive and increasing working capital balance generally indicates a healthy liquidity position, while a declining balance may signal potential challenges in meeting short-term obligations.
• Cash Flow Statements Overview: A comprehensive review of PECO's cash flow statements is essential for understanding its liquidity dynamics. The cash flow statement categorizes cash flows into three main activities:
  • Operating Activities: Cash flow from operating activities reflects the cash generated or used from PECO's core business operations, such as rental income and operating expenses.
  • Investing Activities: Cash flow from investing activities includes cash used for investments in properties and equipment, as well as proceeds from the sale of assets.
  • Financing Activities: Cash flow from financing activities involves cash raised from debt and equity financing, as well as cash used for debt repayments and dividend payments.

By examining these cash flow trends, investors can assess PECO's ability to generate cash from its operations, fund its investments, and manage its debt obligations.

Potential Liquidity Concerns or Strengths:

A thorough analysis of PECO's financial statements and related disclosures is necessary to identify any potential liquidity concerns or strengths. Factors to consider include:

• Debt Maturity Profile: Assessing the timing and amount of PECO's debt maturities helps determine its ability to refinance or repay its obligations as they come due.
• Credit Ratings: Monitoring PECO's credit ratings from rating agencies such as Moody's, Standard & Poor's, and Fitch provides insights into its creditworthiness and access to capital markets.
• Contingent Liabilities: Evaluating PECO's contingent liabilities, such as pending litigation or environmental risks, helps assess potential future cash outflows that could impact its liquidity position.

Conversely, PECO may exhibit liquidity strengths, such as a strong cash position, access to committed credit facilities, or a track record of generating stable cash flows from its properties.

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Phillips Edison & Company, Inc. (PECO) Valuation Analysis

Assessing whether Phillips Edison & Company, Inc. (PECO) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. These elements, when combined, offer a comprehensive view of PECO's current market position.

To determine if PECO is overvalued or undervalued, consider the following:

• Price-to-earnings (P/E) Ratio: This ratio compares PECO’s stock price to its earnings per share (EPS). While a direct P/E ratio for PECO might not be readily available due to specific financial reporting nuances, it's essential to compare PECO’s valuation multiples to those of its industry peers.
• Price-to-book (P/B) Ratio: The P/B ratio measures the market's valuation of PECO relative to its book value of equity.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio assesses the company's total value (equity plus debt) against its earnings before interest, taxes, depreciation, and amortization. A lower ratio compared to peers could suggest undervaluation.

Analyzing PECO's stock performance over the last 12 months (or longer) provides insights into market sentiment and investor confidence. As of recent data, PECO's stock has shown the following trends:

PECO's stock price as of close on April 18, 2025 was $31.22. The 52 week high was $31.99, and the 52 week low was $24.63.

Dividend yield and payout ratios are crucial for income-focused investors. For Phillips Edison & Company, Inc. (PECO), the dividend data reveals:

• Annual Dividend Rate: $1.16
• Forward Annual Dividend Yield: Approximately 3.71% based on a stock price of $31.22.
• Payout Ratio: Investors should also consider the sustainability of the dividend by examining the payout ratio, which indicates the proportion of earnings paid out as dividends.

Analyst consensus on PECO's stock valuation offers a summarized view of expert opinions. These ratings typically range from 'buy' to 'sell,' reflecting analysts' expectations for the stock's future performance. As of April 2025, the analyst consensus for PECO is:

According to the latest analyst ratings, Phillips Edison & Company has a consensus rating of Moderate Buy. The breakdown includes:

• Buy Ratings: 3
• Hold Ratings: 3

The consensus price target among analysts is $32.50, suggesting a potential upside from the current price level.

Here's a table summarizing key valuation metrics for PECO:

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Phillips Edison & Company, Inc. (PECO) Risk Factors

Understanding the risks Phillips Edison & Company, Inc. (PECO) faces is crucial for investors. These risks can be both internal and external, significantly impacting the company’s financial health. External risks include industry competition, regulatory changes, and broader market conditions. Internal risks often relate to operational, financial, and strategic challenges.

Here's a breakdown of key risk areas:

• Industry Competition: The retail real estate sector is highly competitive. PECO faces competition from other REITs, private equity firms, and individual property owners. Increased competition could lead to lower occupancy rates and reduced rental income.
• Regulatory Changes: Changes in zoning laws, environmental regulations, or tax policies can adversely affect PECO's ability to develop or manage properties. Compliance with new regulations may also increase operating costs.
• Market Conditions: Economic downturns, rising interest rates, and shifts in consumer spending habits can impact retail property values and demand. For example, a decrease in consumer spending could lead to higher vacancy rates as retailers struggle.

Recent earnings reports and filings may highlight specific operational, financial, or strategic risks. These could include:

• Operational Risks: These involve property management challenges, such as maintaining high occupancy rates, managing tenant relationships, and controlling operating expenses.
• Financial Risks: Financial risks include managing debt levels, interest rate fluctuations, and access to capital markets. High debt levels can make PECO vulnerable to interest rate increases.
• Strategic Risks: Strategic risks relate to investment decisions, such as property acquisitions and development projects. Poor investment decisions can lead to financial losses.

Mitigation strategies are essential for managing these risks. While specific plans can vary, common strategies include:

• Diversification: Diversifying the property portfolio across different geographic locations and tenant types can reduce the impact of regional economic downturns or industry-specific challenges.
• Risk Management: Implementing robust risk management policies and procedures can help identify, assess, and mitigate potential risks. This includes regular monitoring of key performance indicators and stress-testing financial models.
• Financial Planning: Maintaining a strong balance sheet with manageable debt levels and access to diverse funding sources can provide financial flexibility during challenging times.

Understanding these risks and mitigation strategies is vital for investors. For more insights into PECO's values and strategic direction, explore Mission Statement, Vision, & Core Values of Phillips Edison & Company, Inc. (PECO).

Phillips Edison & Company, Inc. (PECO) Growth Opportunities

Phillips Edison & Company, Inc. (PECO) possesses several key growth drivers that underpin its future prospects. These include strategic market expansions, a focus on grocery-anchored shopping centers, and proactive management of its existing portfolio. PECO's growth strategy is centered around enhancing the value of its properties and capitalizing on opportunities within the retail real estate sector.

Analysis of PECO's growth drivers reveals a multifaceted approach:

• Market Expansion: PECO strategically targets high-growth markets with favorable demographics to expand its footprint.
• Grocery-Anchored Centers: The company focuses on acquiring and managing grocery-anchored shopping centers, which tend to be more resilient to economic downturns and e-commerce disruptions.
• Portfolio Management: PECO actively manages its portfolio through redevelopment, remerchandising, and tenant optimization to increase property values and rental income.

While specific future revenue growth projections and earnings estimates are subject to market conditions and company performance, several factors indicate positive momentum for PECO. For example, in the recent 2024 fiscal year, PECO has demonstrated consistent operational execution, maintaining high occupancy rates and growing its net operating income (NOI). This operational success is a strong indicator of future growth potential.

Strategic initiatives and partnerships also play a crucial role in driving PECO's growth:

• Technology Adoption: Investing in technology to improve property management efficiency and enhance tenant experiences.
• Sustainability Initiatives: Implementing sustainable practices to reduce operating costs and attract environmentally conscious tenants.
• Strategic Partnerships: Collaborating with retailers and other stakeholders to create vibrant shopping destinations.

PECO's competitive advantages position it favorably for continued growth. These advantages include:

• Scale and Expertise: PECO's size and experience in managing grocery-anchored shopping centers provide a competitive edge.
• Tenant Relationships: Strong relationships with national and regional retailers ensure high occupancy rates and stable rental income.
• Disciplined Investment Approach: A rigorous investment process helps PECO identify and acquire properties with strong growth potential.

To provide a clearer picture, consider a hypothetical projection based on available data and industry trends. The following table illustrates potential revenue growth over the next few years:

These projections are based on continued growth in the grocery-anchored retail sector, strategic acquisitions, and effective property management. However, they are subject to change based on various economic and market factors.

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