Seeking Alpha Quant picks in the S&P 500 real estate sector

The quarterly earnings season kicked off on a solid note, with big banks topping expectations and the streaming giant Netflix delivering a beat-and-raise quarter.

"Both the percentage of S&P 500 companies reporting positive earnings surprises and the magnitude of earnings surprises are above their 10-year averages," noted a recent FactSet report.

"During the upcoming week, 112 S&P 500 companies (including 5 Dow 30 companies) are scheduled to report results for the second quarter," said the report.

Notable S&P 500 real estate companies due to report next week are Crown Castle (CCI), Digital Realty Trust (DLR), Alexandria Real Estate Equities (ARE), Weyerhaeuser (WY), Healthpeak Properties (DOC), and CoStar Group (CSGP).

"Overall, we expect a good earnings season for REITs," said BofA Securities in a recent note. "That said, REITs may choose to maintain guidance rather than raise it, amid elevated macro uncertainty."

"We expect best and/or better than expected results and potential guidance raises in Healthcare, select Self-Storage, select Residential and Office REITs, and Shopping Centers. We see the most risk in Industrial on core guidance given softer than expected leasing activity during 2Q and Life Science," said the note.

The Real Estate Select Sector SPDR Fund ETF (NYSEARCA:XLRE) has seen positive returns of 2.88% year-to-date, compared to the broader S&P 500's 7.06% gain.

As quarterly earnings releases intensify, Seeking Alpha's Quant Rating system gives the S&P 500 real estate sector an average health score of 3.06 out of 5. The data-driven rating system awards grades based on valuation, earnings growth, stock performance, and others.

Below are the Strong Buy and Strong Sell recommendations from Quant:

• Host Hotels & Resorts (HST) (Quant Score: 4.81)
• Kimco Realty (KIM) (Quant Score: 4.71)
• VICI Properties (VICI) (Quant Score: 4.50)
• SBA Communications (SBAC) (Quant Score: 1.25)
• Weyerhaeuser (WY) (Quant Score: 1.27)