Taubman Centers, Inc. (TCO) is a real estate investment trust (REIT) engaged in owning, developing, acquiring, and operating regional shopping centers throughout the U.S. A large number of these shopping centers are strategically located in major metropolitan areas. The company's five largest non-anchor tenants are: The Gap (3.5% of mall GLA as of June 30, 2008), Forever 21 (3.3%), Limited Brands (2.6%), Abercrombie & Fitch (2.5%), and Foot Locker (1.9%).
We are concerned about retail stocks in a very uncertain economic environment. Consumer spending patterns are sluggish, and we expect 2008 to be one of the worst holiday shopping seasons in years. TCO missed our 2Q FFO estimates by $0.08 per share due to lower than expected fee income and higher expenses.
Overall, the company's portfolio continues to perform well; TCO reported increases in rents, sales and occupancy in the 2nd quarter vs. the year-earlier period. Additionally, the company has some attractive domestic and international development projects in the pipeline that will incrementally add to earnings over the next several years. We continue our Hold rating on TCO.
Read the full analyst report on TCO
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