Morgan Stanley: Kimco’s third-quarter operating revenue growth accelerates; full-year FFO guidance raised

How much did results and full-year guidance improve?

Kimco’s third-quarter funds from operations (FFO) were $0.47 per share, above the market consensus and Morgan Stanley’s estimate of $0.46. According to the bank, the beat versus its estimate came mainly from cash net operating income and other income.
Same-property net operating income rose 4.9% year over year, above the second quarter’s 3.5%. The company raised its 2026 same-property net operating income growth guidance from 3.25% to 3.65% and raised its FFO guidance by $0.015 to $1.85 per share, above the market consensus and Morgan Stanley’s estimate of $1.83.
The company also lowered its full-year bad debt rate guidance from 55–75 basis points to 50–60 basis points, below the 74 basis points recorded in 2025.

Overall occupancy in the third quarter was 96.6%, up 0.2 percentage points quarter over quarter. Anchor-store occupancy rose to 98.2%, up 0.4 percentage points; small-shop occupancy was 92.9%, unchanged from the previous quarter.
Rent growth across new and renewed leases combined was 12.0%, down from 13.1% in the second quarter. New-lease rent growth fell from 40.4% to 31.5%, while renewal rent growth rose from 6.1% to 7.3%.
Space leased but not yet open represented 3.9 percentage points of occupancy and $76 million in annualized base rent; the respective figures in the second quarter were 4.0 percentage points and $75 million.

The company maintained its guidance for zero net acquisitions in 2026, above its previous guidance; purchases and sales of assets do not necessarily result in net expansion. Redevelopment capital expenditure guidance was raised from $137.5 million to $145 million.
Liquidity at the end of the third quarter was $2.5 billion, down from $2.7 billion in the second quarter, with cash falling from $700 million to $545 million. Over the same period, leverage fell from 5.5 times to 5.3 times.
Morgan Stanley expects solid operating metrics and the raised guidance to generate a positive share-price reaction, and maintained its equal-weight rating and $25 price target. The target uses 13.2 times its estimated 2027 FFO, slightly above the past two-year and ten-year averages of 12.8 times and 12.9 times, respectively.