BMO Capital upgrades Douglas Emmett stock to Market Perform on occupancy stabilization

Investing.com - BMO Capital upgraded Douglas Emmett Inc. (NYSE:DEI) from Underperform to Market Perform on Wednesday, setting a price target of $17.00. The real estate investment trust, with a market capitalization of $3.2 billion and a beta of 1.25, currently offers investors a 4.8% dividend yield.

The upgrade comes as BMO Capital believes Douglas Emmett’s occupancy rates, which had been plummeting, are now "at or near" bottom levels, removing a key concern that had previously driven the firm’s negative outlook.

Douglas Emmett shares have underperformed the broader market this year, falling 14.7% year-to-date compared to a 1.0% decline for the RMZ index, according to BMO Capital’s analysis.

BMO Capital highlighted positive developments in Douglas Emmett’s portfolio, noting that "lease-up of Studio Plaza is progressing well" as a sign of operational improvement for the real estate investment trust.

The firm also identified the company’s multifamily segment as "a bright spot for DEI," suggesting diversification in its property portfolio is providing some stability despite challenges in the office market.

In other recent news, Douglas Emmett Inc. reported strong financial results for the first quarter of 2025, with earnings per share (EPS) of $0.24, significantly surpassing analyst expectations of -$0.03. The company also achieved revenues of $251.54 million, exceeding the forecasted $246.31 million. The real estate investment trust continues to maintain a high occupancy rate of 99.1% in its residential portfolio, reflecting stability in the Los Angeles market. Additionally, Douglas Emmett is advancing redevelopment projects, including Barrington Plaza, and has signed nearly 800,000 square feet in new leases, indicating robust leasing activity.

At its 2025 annual stockholders’ meeting, Douglas Emmett announced the election of eight board members and the ratification of Ernst & Young LLP as the company’s independent auditor for the fiscal year. The company also received approval for a non-binding advisory vote on executive compensation for 2024. Analyst firms have noted Douglas Emmett’s strong operational performance, with some expressing optimism about the company’s strategic focus on redevelopment projects. Douglas Emmett provided guidance for 2025, expecting net income per share to range between $0.07 and $0.13 and funds from operations per fully diluted share between $1.42 and $1.48.

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