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On Tuesday, Truist Securities adjusted its outlook on Boston Properties Inc. (NYSE: NYSE:BXP), reducing the 12-month price target from $75.00 to $71.00 while maintaining a Hold rating on the stock. The revision comes as Truist Securities acknowledges the impact of two significant tenant move-outs in the second quarter of 2025, which affected approximately 475,000 square feet of office space in Boston. Currently trading at $65.49, the stock has moved between $54.22 and $90.11 over the past 52 weeks. According to InvestingPro analysis, Boston Properties appears slightly undervalued based on its Fair Value assessment.
Truist Securities’ analyst Michael Lewis (JO:LEWJ) noted that the updated price target reflects lowered forecasts for the company’s funds from operations (FFO) for the years 2025 and 2026. The adjustments were made to more accurately account for the aforementioned tenant departures. Despite the setbacks, Lewis anticipates that Boston Properties will see a return to positive normalized FFO per share growth in 2026 after experiencing moderate declines from 2023 to 2025. The company maintains a solid dividend yield of 6.07% and has consistently paid dividends for 29 consecutive years, as highlighted in InvestingPro’s analysis.
The new price target set by Truist suggests a 16% total return potential for Boston Properties shares. However, the analyst also expressed caution, pointing out that persistently high interest rates and potential weaknesses in the labor market could present risks to office real estate investment trust (REIT) stocks like Boston Properties.
The commentary from Truist Securities underscores the challenges faced by office REITs in the current economic climate, which includes navigating tenant dynamics and broader market conditions. As Boston Properties looks ahead, the firm’s trajectory will be influenced by its ability to adapt to these challenges and the evolving commercial real estate landscape.
In other recent news, Boston Properties Inc. reported its first-quarter 2025 earnings, showcasing an earnings per share (EPS) of $0.39, which exceeded the forecast of $0.37. The company also reported revenue of $865.2 million, surpassing the expected $835.53 million. Despite these positive financial results, the company experienced a 3.51% decline in after-hours trading due to investor concerns over long-term guidance and market conditions. Boston Properties’ leasing activity increased by 25% compared to the first quarter of 2024, with 1.1 million square feet leased. The company completed over $4.2 billion in financing activities, demonstrating its strong access to capital.
Piper Sandler recently reaffirmed its Overweight rating on Boston Properties, maintaining a price target of $85.00. Analyst Alexander Goldfarb highlighted the company’s growth potential, driven by limited new construction and increasing demand for high-quality office spaces. Boston Properties is seeing a rise in leasing activity, with an increase of over 200,000 square feet since the first quarter of 2025. The firm is experiencing success in key markets such as Midtown Manhattan and Boston’s Back Bay, where space scarcity is pushing businesses to pay higher rents for premium locations. Goldfarb anticipates that these favorable conditions will positively impact Boston Properties’ earnings in the latter half of 2025 and into 2026.
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