Hold Rating for Hudson Pacific Properties Amid Positive Revenue Gains and Leasing Challenges

Analyst John Kim of BMO Capital maintained a Hold rating on Hudson Pacific Properties (HPP – Research Report), with a price target of $4.00.

John Kim’s rating is based on a combination of positive and negative factors surrounding Hudson Pacific Properties. On the positive side, the company reported a notable increase in studio revenue for the fourth quarter of 2024, and they have managed to cut down on general and administrative expenses, indicating efforts toward operational efficiency. Additionally, the company has seen an uptick in office leasing activities, although there was a slowdown in the last quarter. They have made strategic moves to bolster their financial stability by selling assets, such as the Maxwell property, and are in the process of offloading others.
Despite these positive developments, there are significant challenges that contribute to the Hold rating. The occupancy rate for in-service office spaces has declined, and a substantial portion of leases are set to expire in 2025, which includes a major lease with Google. Furthermore, cash leasing spreads have been weak, adding pressure to the company’s financial outlook. These mixed factors suggest a cautious approach, leading to the Hold rating as the company strives to navigate a challenging real estate environment.

In another report released on February 18, Scotiabank also maintained a Hold rating on the stock with a $3.00 price target.

Based on the recent corporate insider activity of 27 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of HPP in relation to earlier this year.