Alexandria Real Estate Equities, Inc. (ARE), with a market cap of $17.3 billion, is an urban office real estate investment trust (REIT) that specializes in life science, agriculture technology, and tech campuses. Headquartered in Pasadena, California, the company also invests in promising life science firms through its venture capital platform. It’s set to unveil its fiscal Q4 earnings results on Monday, Jan. 27, after market close.
Analysts Predict Solid Increment in FFO for Q4
Before the earnings announcement, analysts are forecasting an FFO of $2.39 per share for the quarter, marking a 4.8% increase from the $2.28 per share reported a year ago. In the past four quarters, Alexandria has met Wall Street’s earnings expectations twice while falling short on two occasions. Its previous quarter’s AFFO was reported at $2.37 per share, slightly below analysts’ consensus estimates.
Future Projections Reflect Mixed Expectations
Looking ahead to fiscal 2024, analysts anticipate an FFO of $9.47 per share, a 5.6% rise from $8.97 in fiscal 2023. However, projections for fiscal 2025 indicate a decline of 2.1% year-over-year, bringing the expected FFO to $9.27.
Over the past year, ARE shares have declined by 20.9%, trailing the S&P 500 Index’s 26.3% gain and the Real Estate Select Sector SPDR Fund’s (XLRE) 3.5% increase during the same period.
Mixed Q3 Earnings Feedback Impacts Stock Performance
Following its Q3 earnings release on Oct. 21, ARE shares dropped by 1.3%. Although the adjusted funds from operations (AFFO) of $2.37 per share showed a year-over-year increase of 4.9%, it fell short of market expectations. Investors expressed concerns over slow rental rate growth of 5.1% and a modest 1.5% increase in same-property NOI year-over-year. While total revenue beat expectations at $791.6 million and leasing activity appeared healthy, the 2024 AFFO guidance of $9.45 to $9.49 raised worries about future growth, contributing to the share price decline.
Analysts Maintain Cautious Optimism for ARE Stock
Market experts are cautiously optimistic about Alexandria Real Estate’s stock performance, rating it as a “Moderate Buy.” Out of 14 analysts covering the stock, three recommend a “Strong Buy,” while 11 suggest a “Hold.” This optimism contrasts with three months ago when six analysts favored the “Strong Buy” option.
The average price target for ARE stands at $119.69, indicating a potential upside of 20.7% from its current price.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
