Easterly Government Properties stock rating upgraded by BMO Capital

Investing.com - BMO Capital upgraded Easterly Government Properties (NYSE:DEA) from Underperform to Market Perform on Wednesday, setting a price target of $25.00. According to InvestingPro data, DEA currently trades at a P/E ratio of 55.8x, with a healthy current ratio of 1.48.

The upgrade comes after Easterly Government Properties shares have declined 19.5% year-to-date, compared to a 1.0% drop for the RMZ index during the same period.

BMO Capital cited a "more balanced" risk/reward outlook for the real estate investment trust following the company’s recent dividend cut.

The firm also noted Easterly’s change in strategy as a positive factor, which aims to deliver more attractive earnings growth going forward.

The $25.00 price target established by BMO Capital reflects the firm’s updated assessment of the government-focused REIT’s value following these strategic changes.

In other recent news, Easterly Government Properties reported its first-quarter earnings for 2025, achieving an earnings per share (EPS) of $0.07, which exceeded the forecast of $0.06. However, the company’s revenue was slightly below expectations, coming in at $78.67 million compared to the forecast of $79.04 million. RBC Capital analysts expressed concerns about Easterly’s earnings trend and reduced their price target for the company’s stock to $22 from $27.50, while maintaining an Underperform rating. Similarly, Truist Securities lowered their price target from $30 to $25, maintaining a Hold rating, and adjusted their 2025 funds from operations (FFO) estimate to $2.93 per share, citing acquisition expenses as a factor.

Easterly Government Properties has also filed an amendment to reduce its authorized shares from 200 million to 80 million following a reverse stock split. The company continues to focus on strategic initiatives, including a $1 billion pipeline for future projects and a dividend yield reset to approximately 8%. Additionally, the Federal Aviation Administration is expected to vacate its premises by the fourth quarter of 2026, with the U.S. Forest Services’ space being backfilled by the State of New Mexico. These developments highlight Easterly’s ongoing efforts to manage its capital structure and navigate changes in tenancy.

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