Cousins Properties shares upgraded to Buy as Sunbelt portfolio drives growth prospects

On Thursday, Cousins Properties (NYSE:CUZ) received an upgrade in its stock rating from Hold to Buy by analysts at Jefferies, accompanied by an increase in the price target from $33.00 to $36.00. The upgrade reflects the firm's positive outlook on the company's real estate portfolio and its potential for growth. The stock, which has gained over 36% in the past six months and trades near its 52-week high of $32.55, has shown strong momentum. InvestingPro data reveals several additional insights about the company's performance and valuation metrics that could impact investment decisions.

The analysts at Jefferies highlighted the quality of Cousins Properties' portfolio, which comprises modernized and well-situated properties in the Sunbelt markets. These markets are expected to continue drawing in-migration, presenting a significant opportunity for the company to increase occupancy, especially after a substantial move-out scheduled for July 2025.

With a market capitalization of $4.85 billion and an impressive track record of maintaining dividend payments for 46 consecutive years, the company offers a current dividend yield of 4.18%.

Jefferies' analysts believe that the projections for Cousins Properties in 2025 and beyond may be underestimating the positive effects of the company's recent acquisitions. These acquisitions have been accretive, meaning they are expected to contribute positively to earnings.

Moreover, Cousins Properties boasts the lowest cost of capital within the Office coverage universe that Jefferies tracks. This advantageous position is anticipated to allow the company to continue making acquisitions at cap rates that are accretive, further strengthening its portfolio and financial position.

The revised price target of $36.00 represents Jefferies' confidence in the company's ability to capitalize on these factors and deliver growth. The rating upgrade and new price target suggest a favorable outlook for Cousins Properties' shares in the eyes of Jefferies' analysts. However, InvestingPro analysis indicates the stock may be trading above its Fair Value, with a relatively high P/E ratio of 90.68. Investors can access comprehensive valuation metrics and additional ProTips through the full Pro Research Report, available for over 1,400 US stocks.

In other recent news, Cousins Properties Incorporated has been in the spotlight for its significant financial activities and acquisitions. The company has recently secured Sail Tower, a premium office property in Austin, for $521.8 million, as well as Vantage South End, an office property in Charlotte, for $328.5 million. These acquisitions are part of the company's strategic focus on trophy assets and opportunistic investments.

In addition to these acquisitions, Cousins Properties has announced several public offerings. The company has priced a $400 million offering of senior unsecured notes to fund the acquisition of Sail Tower. Concurrently, Cousins Properties launched a public offering of 9.5 million shares and another offering of 6 million shares, aiming to raise approximately $188 million. These offerings are part of the company's strategy to fund future acquisitions and development projects.

On the earnings front, Cousins Properties reported robust results, with Funds From Operations (FFO) reaching $0.67 per share and a 4.4% increase in same-property net operating income. Following these results, the company's 2024 FFO guidance was upgraded to between $2.66 and $2.70 per share.

In terms of analyst coverage, Baird maintained an Outperform rating on Cousins Properties and increased the price target to $34.00. Truist Securities also adjusted its outlook on Cousins Properties, elevating the real estate investment trust's price target to $33.00, reflecting confidence in the company's growth potential. Conversely, BMO Capital moved its rating to 'Market Perform' following a strong performance in 2024.

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