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Investing.com - Jefferies lowered its price target on Alexandria Real Estate (NYSE:ARE) to $62.00 from $80.00 on Monday, while maintaining a Hold rating on the life sciences real estate company. The new target sits slightly above the current stock price of $58.22, with shares having plummeted 25.23% in the past week alone.
The significant $18 reduction in price target comes as Jefferies cited several near-term headwinds facing the company, including weak demand, elevated vacancies, heavy retenanting capital expenditures, and execution risk on dispositions.
Jefferies noted that these challenges will likely impact Alexandria’s performance despite the company’s position as "the leading player in life science real estate with a strong balance sheet and high-quality assets."
The firm also highlighted management’s signal of a likely dividend cut next year, with Jefferies modeling an approximate 30% reduction in the first quarter of 2026 to $3.70 annualized, compared to the current $5.28 dividend.
This potential dividend reduction would "further weigh on investor sentiment," according to Jefferies, contributing to its more conservative outlook on the stock while maintaining its Hold recommendation.
In other recent news, Alexandria Real Estate Equities reported a significant downturn in its third-quarter 2025 earnings, with an earnings per share (EPS) of -$1.38, missing the forecasted $0.50 by a wide margin. This 376% negative surprise overshadowed a slight revenue beat, leading to increased investor concern. Following the earnings report, BTIG downgraded Alexandria Real Estate from Buy to Neutral, citing a grim initial outlook for 2026 and a $0.25 downward revision to the company’s full-year guidance. The company has also released its preliminary expectations for 2026 funds from operations (FFO), projecting an adjusted FFO per share in the range of $6.25 to $6.85. Alexandria Real Estate acknowledged that various factors, such as regulatory changes and economic conditions, could materially affect these expectations. The company plans to provide further guidance at its Investor Day on December 3, 2025. These developments have sparked increased scrutiny from analysts and investors alike.
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