Pasadena, California’s Alexandria Real Estate Equities, Inc. (ARE) is a leading life science REIT specializing in the development and operation of collaborative life science campuses in prime innovation areas such as Greater Boston, the San Francisco Bay Area, San Diego, Seattle, Maryland, Research Triangle, and New York City. With a market capitalization of $17.1 billion, ARE primarily focuses on life sciences, agtech, and technology facilities.
Large-Cap Status and Industry Leadership
Companies valued at $10 billion or more fall into the “large-cap” category, and ARE is a pioneer in the life science real estate sector. The company has earned commendations for its transparency and disclosure practices.
Recent Stock Performance
Despite its prominent position, ARE’s shares have seen a downturn, dropping 26.2% from a 52-week high of $131.82, reached on December 20, 2023. In the last three months, the stock decreased by 20.4%, trailing behind the broader Nasdaq Composite’s ($NASX) 7.5% rise during that period.
On a yearly scale, ARE shares have fallen 24.9%, markedly underperforming NASX, which boasts a 29.1% return over the same 52 weeks. Year-to-date, shares of ARE are down nearly 23.3%, contrasting sharply with NASX’s gain of approximately 29.1% during the same timeframe.
ARE’s bearish trend is further indicated by its trading below both the 200-day and 50-day moving averages since late October.
Third Quarter Earnings Report
After announcing its Q3 earnings on October 21, ARE’s shares fell 1.3%. The company posted revenues of $791.6 million, reflecting a 10.9% increase from the same quarter last year, driven by strong leasing activities and rising rental rates. Additionally, its Adjusted Funds From Operations (AFFO) rose by 4.9% year-over-year to $2.37 per share. However, the company lowered its full-year 2024 revenue and EPS guidance due to tenant write-offs and lease terminations at a key property, which may have dampened investor sentiment.
Comparison with Competitors
ARE’s challenges are highlighted when compared to BXP, Inc. (BXP), which saw a 2.7% gain over the past year and a 4.5% rise year-to-date.
Analyst Outlook
Despite recent struggles, analysts maintain a moderately optimistic view on ARE. The stock carries a consensus rating of “Moderate Buy” from 14 analysts, with an average price target of $120.54, indicating a potential 23.9% upside from its current price.
On the date of publication, Neharika Jain did not hold positions in any securities mentioned in this article. All information and data in this article are provided for informational purposes. For further details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed in this article are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.
