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On Friday, Piper Sandler analyst Alexander Goldfarb increased the price target for Alexander & Baldwin (NYSE:ALEX) stock to $24.00 from $23.00. The firm sustained its Overweight rating on the company, indicating a positive outlook on the stock’s potential performance.
Goldfarb praised the management for its effective execution, noting that the real estate investment trust (REIT), which focuses on Hawaiian properties, is performing better than anticipated. The 2025 guidance provided by Alexander & Baldwin has surpassed expectations, a testament to the strength of the company’s operations. The analyst emphasized the success in cutting costs, particularly through the expedited winding down of the legacy land business.
The analyst’s initial concerns regarding persistent legacy overhead costs, such as pension obligations or issues related to long-tenured employees, appear to have been mitigated. On the tenant side, Alexander & Baldwin is experiencing minimal credit issues, with strong demand for leasing.
Despite the company’s current success, management has conveyed its commitment to further improving commercial real estate (CRE) operations, cost structures, and pursuing both external and internal investments throughout 2025. Goldfarb also expressed approval of the company’s new strategy to retain more of the Maui Business Park as it continues to develop, rather than selling to users as it did previously.
The analyst’s updated price target reflects confidence in Alexander & Baldwin’s strategic focus and its ability to enhance shareholder value through operational improvements and savvy investment decisions.
In other recent news, Alexander & Baldwin Holdings Inc. reported its fourth-quarter earnings for 2024, surpassing analyst expectations with an earnings per share (EPS) of $0.17, compared to the forecasted $0.14. The company announced a full-year 2024 funds from operations (FFO) of $1.37 per share, marking an increase of $0.28 year-over-year. Additionally, the company reduced its general and administrative expenses by $4.2 million in 2024, which represents a 12.4% reduction. Leased occupancy improved to 94.6%, a sequential increase of 60 basis points, while economic occupancy stood at 92.9%. Looking forward, Alexander & Baldwin provided a 2025 FFO guidance of $1.13 to $1.20 per share, with expectations for same-store net operating income (NOI) growth between 2.4% and 3.2%. The company continues to focus on optimizing its cost structure and enhancing its commercial real estate portfolio’s performance. Alexander & Baldwin’s strategic initiatives and strong financial performance in the fourth quarter position the company for continued growth in 2025.
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