Pasadena-based Alexandria Real Estate Equities, Inc. (ARE) is an urban office REIT that engages in the ownership, operation, and development of life science and technology properties. With a market cap of $20.8 billion, Alexandria provides lease spaces to the life science and technology industries, which are primarily located in AAA urban innovation cluster locations. The real estate giant is expected to announce its Q3 after the market closes on Monday, Oct. 21.
Ahead of the event, analysts expect Alexandria to report funds from operations (FFO) of $2.37 per share, up 4.9% from $2.26 per share reported in the year-ago quarter. It has surpassed the FFO per share estimates in three of the past four quarters while missing on another occasion. Its FFO per share for the last reported quarter grew by 5.4% year-over-year to $2.36 while marginally exceeding Wall Street's expectations.
Looking ahead to fiscal 2024, analysts expect Alexandria to report FFO per share of $9.47, up 5.6% from $8.97 in fiscal 2023. In fiscal 2025, its FFO per share is expected to grow 2.1% year-over-year to $9.67.
ARE has dipped 7.6% on a YTD basis, substantially lagging behind the S&P 500 Index’s ($SPX) 19.7% gains and the Real Estate Select Sector SPDR Fund’s (XLRE) 10.8% returns during the same time frame.
Shares of Alexandria dropped 3.5% in the trading session after the release of its Q2 earnings on Jul. 22. Although the company reported a 7.4% year-over-year growth in total revenues, reaching $766.7 million, it fell short of Wall Street’s expectations of $776.3 million. Additionally, its aggregated cash from operations for the previous two quarters has declined by 4% year-over-year to $753 million at a time when its topline has observed notable increases. This raises concerns regarding the company's cash-generating capabilities.
On a positive note, the company has raised its quarterly dividend payout for Q3 2024 by 4.8% year-over-year to $1.30, demonstrating its commitment to shareholders.
The consensus opinion on ARE stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 14 analysts covering the stock, six recommend “Strong Buy,” one suggests “Moderate Buy,” and seven advise a “Hold” rating.
The mean price target of $136.31 suggests a potential upside of 16.4% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
