Compass Point upgrades BXP to Buy after relative underperformance

Compass Point upgraded BXP (BXP) to Buy from Neutral with a price target of $88, up from $80. BXP has lagged its two Manhattan focused office peers by 30% year-to-date, despite having a better balance sheet and higher average quality office portfolio, the analyst tells investors in a research note. The firm says that as an investment grade credit, BXP has continuous access to the unsecured debt markets. While Compass believes BXP’s West Coast office exposure has held back shares due to weaker office fundamentals, it believes a slow rebound in tech demand, largely spurred by artificial intelligence, could help tech leasing demand increase. With a 6.9% implied yield, BXP represents the best relative value in the office space, contends the firm.