UPDATE: Credit Suisse Starts Alexandria Real Estate (ARE) at Neutral (correction)

(Updated - June 22, 2022 4:13 PM EDT)

Credit Suisse analyst Tayo Okusanya assumes coverage on Alexandria Real Estate (NYSE: ARE) at Neutral, PT 140.00.

The analyst comments "We initiate coverage of ARE with a Neutral rating and $140 TP. We believe ARE is the best example of a pure-play REIT in the life science sector (>80% of revenue). Our thesis is that life science fundamentals appear set to slow, as we expect smaller life science companies will find access to capital more challenging in this environment. We expect this to manifest into a slower earnings growth trajectory, driven by a slowdown in occupancy/rent growth, unfavorable marks on the $1.7B VC investment portfolio, and a lower future development and acquisition pipeline due to a more expensive cost of capital (stock is down ~41% YTD). Our $140 TP is derived via our dividend discount model (DDM) and reflects a 16.7x multiple on our 2022 FFO/share estimate."

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