UBS Remains Sidelined on Alexandria Real Estate (ARE) After Adjusting Estimates - PT to $110
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UBS reiterated a Neutral rating on Alexandria Real Estate (NYSE: ARE), and raised the price target to $110.00 (from $94.00), after adjusting estimates. UBS revised 2016 FFO estimates to $5.53 vs. $5.48-$5.54 guidance range and 2017 FFO to $6.05 from $5.98, primarily to reflect 2Q results and the One Kendall Square acquisition.
Analyst Nick Yulico commented, "Demand from life science tenants remains strong against a tight supply backdrop, resulting in y/y rent growth of 15% in ARE's core markets. With 2Q earnings, ARE now expects cash SS NOI growth of +4%-6% (+3.5%-5.5% previously) and cash rent spreads in the +7%-10% range (+6%-9% previously). The 3.5m sf development pipeline (81% leased) remains on track to create $195m-210m of incremental annual NOI through 2016-18. We think these are good projects that will cater to lab space and tech demand, but we believe much of this NAV creation benefit (and associated FFO growth) is already priced into ARE's stock today, which trades at a ~5% discount to our revised forward NAV estimate."
Shares of Alexandria Real Estate closed at $114.52 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
Related EntitiesUBS, Earnings, Definitive Agreement
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