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On Tuesday, Truist Securities analysts adjusted their outlook for Easterly Government Properties (NYSE: NYSE:DEA), lowering the price target to $25 from $30 while maintaining a Hold rating. Currently trading at $23, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $21 to $25. This adjustment reflects a combination of factors including a $31.46 discounted cash flow, a 43% assumed discount to the projected net asset value (NAV) for the coming year, and a 7.5x 2026 estimated funds from operations (FFOps).
The analysts assume that Easterly Government Properties will keep its operating portfolio nearly fully leased. With a healthy current ratio of 1.48 and revenue growth of 6.82% in the last twelve months, their model anticipates $140 million in acquisitions throughout 2025, with no dispositions expected. Additionally, the model includes an assumed $5 million in equity issuance during the second quarter of 2025.
Truist Securities revised its 2025 funds from operations (FFO) estimate to $2.93 per share, down from $3.00 per share. This estimate falls slightly below the lower end of the management’s guidance range of $2.95 to $3.00 per share and below the consensus estimate of $2.96 per share. The variance is attributed to the inclusion of acquisition expenses in Truist’s model, which are not part of the management’s guidance. Get deeper insights into DEA’s financial health and 6 exclusive InvestingPro Tips to make informed investment decisions.
The analysts also adjusted their estimate of core FFO, excluding certain factors such as loss on extinguishment of debt and non-real estate depreciation. Their core FFO estimate is now $2.96 per share, down from $3.02 per share, slightly below the management’s adjusted guidance range of $2.98 to $3.03 per share. The company maintains a notable 7.87% dividend yield, making it an interesting consideration for income-focused investors.
In other recent news, Easterly Government Properties reported its first-quarter 2025 earnings, revealing a mixed financial performance. The company exceeded earnings per share (EPS) expectations with $0.07, surpassing the forecast of $0.06, while revenue slightly missed projections at $78.67 million against an expected $79.04 million. RBC Capital analysts responded to these results by lowering the stock price target from $27.50 to $22 and maintaining an Underperform rating, citing uncertainties in the company’s earnings trajectory. Easterly Government Properties has also undertaken strategic financial adjustments, including a reverse stock split and a reduction in the dividend yield to approximately 8%. Additionally, the company announced a significant reduction in authorized shares from 200 million to 80 million, following a one-for-two and a half reverse stock split. The company has a robust $1 billion pipeline for future projects and has made notable acquisitions, such as a 290,000 square foot facility leased to the District of Columbia government. These developments are part of Easterly’s ongoing efforts to realign its capital structure and focus on long-term growth initiatives.
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