Boston, Massachusetts-based BXP, Inc. (BXP) is the largest publicly traded developer, owner, and manager of premier workplaces. Valued at $11.7 billion by market cap, the company owns, develops, and manages workplaces and office properties. BXP operates as a real estate investment trust (REIT), including properties owned by joint ventures totaling 53.5 million square feet and 186 properties.
Shares of this REIT have underperformed the broader market considerably over the past year. BXP has gained 10.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 24.3%. In 2024, BXP’s stock rose 6%, compared to SPX’s 17.2% rise on a YTD basis.
Narrowing the focus, BXP has also lagged behind the iShares Cohen & Steers REIT ETF (ICF). The exchange-traded fund has gained about 16.7% over the past year. Moreover, the ETF’s 8.8% gains on a YTD basis outshine the stock’s returns over the same time frame.
On Jul. 30, BXP shares closed up more than 1% after reporting its Q2 results. Its FFO of $1.77 surpassed consensus estimates of $1.72. The company’s EPS declined 22.7% year over year to $0.51. Its revenue stood at $850.5 million, up 4.1% year over year. For Q3, BXP expects EPS to be between $0.54 and $0.56 and FFO between $1.80 and $1.82. BXP expects full-year FFO to be between $7.09 and $7.15 and EPS to be between $2.08 and $2.14.
For the current fiscal year, ending in December, analysts expect BXP’s FFO to decline 2.3% to $7.11 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in the last four quarters.
Among the 21 analysts covering BXP stock, the consensus is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings, 13 “Holds,” and one “Strong Sell.”
On Aug. 27, Truist Financial Corporation (TFC) analyst Michael Lewis maintained a “Hold” rating on BXP and increased the price target to $77, implying a potential upside of 3.5% from current levels. He highlighted narrowed credit spreads in the office REIT sector and anticipated reduced short-term interest rates. Lewis also highlights BXP's recent debt issuance but remains cautious, citing the potential for better opportunities elsewhere in the market.
While BXP currently trades above its mean price target of $70.39, the Street-high price target of $78 suggests an upside potential of 4.8%.
On the date of publication, Rashmi Kumari 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.
