Boston-based BXP, Inc. (BXP), the largest publicly traded developer, owner, and manager of premier workplaces, has a market cap of $11.7 billion. Operating as a real estate investment trust (REIT), BXP owns, develops, and manages office properties, including 186 properties and 53.5 million square feet through joint ventures.
Shares of this leading office REIT have outpaced the broader market considerably over the past year. BXP has climbed 49.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31%. However, in 2024, BXP’s stock rose 15%, compared to SPX’s 25.2% rise on a YTD basis.
Narrowing the focus, BXP has also outperformed the VanEck Office and Commercial REIT ETF (DESK). The exchange-traded fund has gained about 41.8% over the past year. But, the ETF’s 17.2% gains on a YTD basis outshine the stock’s returns over the same time frame.
On Oct. 29, BXP reported its Q3 earnings, and its shares dropped 1.4% and remained in the red for the next couple of trading sessions. It reported an FFO of $286.9 million, or $1.81 per share, matching analyst estimates. Net income was $83.6 million, or $0.53 per share. Lease revenue stood at $799.5 million, slightly below the $803.8 million expected by analysts. The company projects full-year FFO between $7.09 and $7.11 per share.
Despite that, the market's optimism remains supported by factors like Federal Reserve rate cuts and a trend of returning to office spaces, which benefits premier workplace providers like BXP.
For the current fiscal year, ending in December, analysts expect BXP’s FFO to decline 2.5% to $7.10 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in all of the last four quarters.
Among the 22 analysts covering BXP stock, the consensus is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, 13 “Holds,” and one “Strong Sell.”
This consensus is slightly more bullish than two months ago, when seven analysts assigned a “Strong Buy” rating for the stock.
On Nov. 18, Barclays PLC (BCS) analyst Brendan Lynch increased BXP's price target to $89 from $88 while maintaining an “Equal-Weight” rating. The update follows a revision of models within the real estate investment trust and communications infrastructure sectors after earnings reports.
BXP’s mean price target of $82.72 represents a premium of 2.6% from the current market prices. The Street-high price target of $105 suggests an upside potential of 30.2%.
