Street Calls of the Week
Investing.com - Douglas Emmett Inc. (NYSE:DEI), a $3.16 billion market cap REIT with a notable 20-year dividend payment history and current yield of 4.88%, received a Neutral rating initiation from Cantor Fitzgerald on Wednesday, with a price target of $16.00, representing a potential 2.8% upside from current levels. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value assessment.
The real estate investment trust, which specializes in office and multifamily properties primarily in Los Angeles and Honolulu, was noted for its small office tenant platform that averages 2,500 square feet per tenant.
Cantor Fitzgerald highlighted that this small tenant approach functions more like a multifamily portfolio than a traditional office platform, resulting in less downtime and smaller capital expenditure requirements compared to typical office standards.
The firm’s price target is based on a 2026 estimated AFFO (Adjusted Funds From Operations) multiple of 15.1x, which sits below the 15.9x average for Douglas Emmett’s property sector peers.
Potential catalysts for the stock could include faster-than-expected lease-up at Studio Plaza, while the company’s decision to convert its recent Wilshire acquisition to residential properties resembles its successful Bishop Place conversion, though Cantor Fitzgerald notes this will be a multi-year project.
In other recent news, Douglas Emmett Inc. reported its Q2 2025 earnings, which surpassed analysts’ expectations. The company posted an earnings per share (EPS) of -$0.04, beating the forecasted -$0.05. Revenue for the quarter was $252.43 million, slightly above the anticipated $250.78 million. These results indicate a smaller-than-expected loss for the company. Despite these positive earnings and revenue surprises, broader market conditions have raised concerns among investors. The company’s future guidance remains a focal point for stakeholders. As these developments unfold, analysts and investors continue to monitor the company’s performance closely.
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