On Wednesday, Citi revised its stance on Boston Properties Inc. (NYSE:BXP), raising the real estate company's price target to $74.00 from the previous $62.00. The firm maintained its Neutral rating on the stock. The adjustment follows Boston Properties' second-quarter earnings, which led to changes in Citi's financial model for the company.
The updated model takes into account new operating, financing, and transaction assumptions. Consequently, the estimated funds from operations (FFO) per share for the year 2024 have been adjusted to $7.11, a slight decrease from the prior estimate of $7.04. For the year 2025, the estimated FFO per share is now set at $7.21, down from the previous forecast of $7.24.
Citi's revised price target of $74 reflects a roughly 14 times multiple of the anticipated adjusted funds from operations (AFFO) for the year 2025. This new target represents an increased valuation for Boston Properties based on the firm's future financial performance expectations.
Boston Properties, a self-administered and self-managed real estate investment trust (REIT), is known for owning, managing, and developing office properties across the United States. The company's portfolio includes several high-profile properties in key markets such as Boston, Los Angeles, New York, San Francisco, and Washington, D.C.
The change in the price target suggests that Citi acknowledges the potential for Boston Properties' performance to align with the new financial projections. It is important to note that the Neutral rating indicates that Citi does not see the stock as overvalued or undervalued at the current level, despite the increased price target.
In other recent news, Boston Properties has seen a surge in leasing activity and an increase in funds from operations (FFO) per share guidance, following an impressive second quarter. The company finalized over 1.3 million square feet of leasing, marking a 41% uptick from the same period in the preceding year.
Boston Properties' adjusted earnings per share (EPS) for the fourth fiscal quarter were reported at $0.13, surpassing expectations by $0.05, despite a 6.5% decline in revenue compared to the previous year.
Piper Sandler and Truist Securities have both adjusted their financial outlook for Boston Properties. Piper Sandler increased the company's price target from $70.00 to $78.00, maintaining a Neutral rating, while Truist Securities raised the price target to $77 from $67 and kept a Hold rating on the stock. Both firms' revised forecasts are based on detailed analyses of the company's future earnings and operations.
Finally, Boston Properties has been recognized as one of the world's most sustainable companies by Time Magazine and is actively pursuing acquisitions and residential projects. These recent developments indicate a robust outlook for Boston Properties, with strong leasing activity and strategic initiatives providing a solid foundation for future growth.
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