The chart technicals on Easterly Government Properties $DEA have rolled over to favor the Bears. A bear watch is on with this stock.
$DEA Stock Technical Analysis
$DEA stock is in a technical strong downtrend. Long-term indicators suggest a continuation of the downtrend. The MACD on the daily chart has just gone negative while the money flow is falling further below zero.
The 2-hour chart of $DEA for the last 20 days shows that momentum in the stock shifted and went bearish on November 1, 2022. The stock is now within a downtrend channel.
What changed the momentum in $DEA stock was the company’s quarterly financials.
Easterly Government Properties Reports Third Quarter 2022 Results
On November 1, 2022, Easterly Government Properties announced its results of operations for the quarter ended September 30, 2022. Easterly Government Properties reported Q3 adjusted FFO of 32c versus the consensus estimate of 34c. The company reported Q3 revenue of $75.04M versus the consensus estimate of $75.95M.
“As macroeconomic headwinds challenge the REIT industry, the stability and attractive yield of our dividend continues to differentiate Easterly,” said CFO and COO Meghan Baivier. “With a potential recession in sight, it gives me great comfort knowing 98% of the cashflows supporting our dividend originate with the United States Government.”
Easterly Government cut to Neutral at Compass Point
On November 3, 2022, Compass Point analyst Merrill Ross changed Easterly Government Properties rating to Neutral from buy and lowered the price target to $17, which is lower than $21. Ross said that the Q3 FFO was in line with his revised expectations, but that is not the story here because the action that surprised us was that Easterly got rid of a portfolio of GSA-owned properties at a cap rate of around 7.2%. When the company draws down its revolver to fund TIs associated with lease renewals it will put pressure on FFO and earnings will continue to decline. Ross said that Easterly needs to provide an update on acquisition activity and terms.