Piper Sandler maintains $85 target on Boston Properties stock

Published 16/05/2025, 15:42
Piper Sandler maintains $85 target on Boston Properties stock

On Friday, Piper Sandler reaffirmed its confidence in Boston Properties Inc. (NYSE:BXP), maintaining an Overweight rating and a price target of $85.00. The firm’s analyst, Alexander Goldfarb, highlighted the company’s potential for growth, likening the current state of the office sector to the recent success of the apartment market. Goldfarb’s optimistic outlook is based on the combination of limited new construction and increasing demand for high-quality office spaces, which he believes will benefit landlords like Boston Properties. Currently trading at $66.78, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $62 to $91. The company has maintained dividend payments for 29 consecutive years, currently offering a 5.85% yield.

Earlier in the week, Boston Properties’ management engaged with institutional investors at a dinner event. Despite broader economic concerns, the company’s leasing activity is on the rise, with both active and potential leases growing by over 200,000 square feet since the first quarter earnings report of 2025. This growth is particularly notable as it includes agreements set to address vacancies expected in 2025. With revenue of $3.4 billion in the last twelve months and a 3.47% growth rate, InvestingPro data reveals the company maintains strong financial metrics, including a healthy current ratio of 1.17 and robust gross profit margins of 60.47%.

Goldfarb underscored the urgency with which tenants are seeking premium office locations in areas like Midtown Manhattan and Boston’s Back Bay, where space is becoming increasingly scarce. Boston Properties is also experiencing success in the Metro DC/Northern Virginia area, where businesses are willing to pay higher rents for buildings that best suit their employees’ needs.

The analyst anticipates that these favorable conditions will contribute positively to Boston Properties’ earnings, with an expected acceleration in the second half of 2025 that should carry into 2026. Goldfarb’s reiteration of the Overweight rating reflects his expectation that the company will continue to outperform in its market.

In other recent news, BXP Inc reported its first-quarter 2025 earnings, showcasing an earnings per share (EPS) of $0.39, which surpassed the projected $0.37. The company also reported revenue of $865.2 million, exceeding the forecast of $835.53 million. Despite these positive earnings and revenue figures, BXP Inc’s stock experienced a decline of 3.51% in after-hours trading, reflecting investor concerns over the company’s long-term guidance. BXP Inc also completed significant financing activities totaling over $4.2 billion, demonstrating strong access to capital markets. The company reported a 25% increase in leasing activity, with 1.1 million square feet leased compared to the same quarter last year. Additionally, BXP Inc narrowed its 2025 Funds From Operations (FFO) guidance to a range of $6.80 to $6.92 per share. The company is targeting 4 million square feet of leasing for 2025 and anticipates occupancy growth in the following years.

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