Alexandria Equities (ARE) has received a new Hold rating, initiated by Jefferies analyst, Peter Abramowitz.
Peter Abramowitz has given his Hold rating due to a combination of factors affecting Alexandria Equities. The company, known for its strong presence in the lab and life science real estate sector, faces challenges from a supply and demand imbalance that is expected to persist until 2026. This imbalance is likely to impact occupancy rates, re-leasing spreads, and the potential for earnings growth from new developments.
Despite Alexandria Equities’ historically strong earnings growth, the current market conditions, including high vacancy rates in key markets like the Bay Area and Boston, pose significant headwinds. Additionally, the company’s development pipeline, while substantial, is projected to be earnings neutral due to the cost of debt and expected disposition cap rates. Furthermore, while biotech funding has improved, it has not yet translated into increased demand, as evidenced by declining job listings in the life sciences sector. These factors contribute to the Hold rating, reflecting a cautious outlook on the company’s near-term growth prospects.
According to TipRanks, Abramowitz is a 2-star analyst with an average return of -1.2% and a 45.45% success rate. Abramowitz covers the Real Estate sector, focusing on stocks such as Alexandria Equities, Boston Properties, and CBRE Group.
In another report released on March 10, J.P. Morgan also maintained a Hold rating on the stock with a $117.00 price target.