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On Monday, RBC Capital analysts adjusted their outlook on Easterly Government Properties (NYSE:DEA) stock, reducing the price target to $22 from $27.50 while retaining an Underperform rating. The revision follows the company’s first-quarter 2025 results. According to InvestingPro data, the stock appears undervalued at its current price of $21.73, despite falling over 25% in the past six months.
The company’s recent report was mostly in line with expectations, according to RBC Capital. The Board of Easterly Government Properties has decided to initiate a reverse stock split and decrease the dividend. Despite the planned reduction, InvestingPro data shows the company maintains a significant 8.28% dividend yield, though dividend growth has declined by 32% over the last twelve months.
The analysts expressed concerns about the company’s earnings trend due to anticipated changes in tenancy. The Federal Aviation Administration is expected to vacate its premises by the fourth quarter of 2026, and the downsizing of the U.S. Forest Services is set to be backfilled by the State of New Mexico.
Despite these developments, RBC Capital maintained its Underperform rating on Easterly Government Properties stock, citing continued uncertainty in the company’s earnings trajectory.
In other recent news, Easterly Government Properties reported its first-quarter earnings for 2025, revealing a mixed financial performance. The company exceeded earnings per share (EPS) expectations with $0.07, surpassing the forecast of $0.06. However, revenue slightly missed the mark, coming in at $78.67 million against a projected $79.04 million. Additionally, Easterly Government Properties has reduced its authorized shares of common stock from 200 million to 80 million following a reverse stock split. This corporate action is part of the company’s strategy to manage its capital structure. In terms of future outlook, Easterly projects a full-year core funds from operations (FFO) per share between $2.98 and $3.30, with a focus on diversifying its portfolio. The company is also strategically reinvesting to drive future cash flow growth, as stated by CEO Daryl Crate. Furthermore, Easterly has announced two new additions to its portfolio, including a federal courthouse facility in Medford, Oregon, and a facility leased to the District of Columbia government. These developments underscore Easterly’s commitment to growth and financial prudence.
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