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Uniti (UNIT) Surges 8.8%: Is This an Indication of Further Gains?

Zacks Equity Research
·2-min read

Uniti Group UNIT shares ended the last trading session 8.8% higher at $5.74. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 12.1% loss over the past four weeks.

The increased optimism in the stock stems from the recent media news of the merger between Uniti and a telecommunications company, Windstream. The expected deal is valued at $15 billion, including debt.

This real estate investment trust is expected to post quarterly funds from operations (FFO) of $0.35 per share in its upcoming report, which represents a year-over-year change of -10.3%. Revenues are expected to be $287.26 million, down 0.9% from the year-ago quarter.

FFO and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in FFO estimate revisions are strongly correlated with near-term stock price movements.

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For Uniti, the consensus FFO per share estimate for the quarter has been revised 1% lower over the last 30 days to the current level. And a negative trend in FFO estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on UNIT going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Uniti belongs to the Zacks REIT and Equity Trust - Other industry. Another stock from the same industry, CareTrust REIT CTRE, closed the last trading session 1.3% higher at $23.90. Over the past month, CTRE has returned -2.4%.

CareTrust REIT's consensus FFO per share estimate for the upcoming report has changed +0.4% over the past month to $0.37. Compared to the company's year-ago EPS, this represents a change of +5.7%. CareTrust REIT currently boasts a Zacks Rank of #3 (Hold).

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Uniti Group Inc. (UNIT) : Free Stock Analysis Report

CareTrust REIT, Inc. (CTRE) : Free Stock Analysis Report

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Zacks Investment Research