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Investing.com - Truist Securities downgraded Cousins Properties (NYSE:CUZ) from Buy to Hold on Wednesday, while raising its price target to $31.00 from $29.00. The $4.95 billion office REIT currently trades at $29.47, with InvestingPro data showing a notably high P/E ratio of 86.5.
The downgrade comes despite Cousins Properties being the second-best performing office REIT stock in Truist’s coverage universe year-to-date, down just 3% compared to the VNQ index’s 1% gain.
Truist cited its "relatively cautious view of the office sector overall" as a key factor in the rating change, which also affected another office REIT, downgraded in the same analysis.
The firm noted that while Cousins Properties maintains low financial leverage compared to other office REITs, it is merely average when measured against the 15 apartment and healthcare REITs in Truist’s coverage.
Truist’s analysis determined that Cousins Properties’ projected earnings growth rates and PEG ratios are "less attractive than for most of the apartment and healthcare REITs" in their coverage universe.
In other recent news, Cousins Properties reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.12, which fell short of analysts’ expectations of $0.16. However, the company exceeded revenue forecasts, achieving $250.33 million compared to the anticipated $230.51 million. Cousins Properties has also priced a $500 million offering of senior unsecured notes at 5.250% due in 2030, with the transaction expected to close on June 6, 2025. The proceeds from this offering will be used to repay existing senior notes due in 2025 and to reduce borrowings under the company’s credit facility. Additionally, Cousins Properties declared a cash dividend of $0.32 per common share for the second quarter of 2025. Portfolio occupancy improved to 90%, and the company raised its full-year funds from operations (FFO) guidance to $2.79 per share, reflecting a 3.7% growth. The firm’s strategic focus remains on development and acquisition in high-growth Sun Belt markets, with major financial institutions such as Wells Fargo (NYSE:WFC) Securities and J.P. Morgan managing the senior notes offering.
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