Barclays on U.S. REITs: Getting Positive on Office; Accelerating Recovery into 2012
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Up: 8 | Down: 5 | New: 26
Rating Summary:
20 Buy, 15 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays on U.S. REITs: Getting Positive on Office; Accelerating Recovery into 2012
Barclays analyst says, "We are revising our investment view on the office subsector to positive, from neutral, based on a fundamental inflection and recovery that we do not think is fully priced into the stocks. The three key themes we expect to differentiate the office stocks include: 1) CBD markets appear poised to recover stronger/faster than suburban markets, 2) we believe Midtown Manhattan in particular is positioned to outperform expectations and 3) the planned supply increase Downtown will likely be mitigated by several factors that will drive stronger demand over time."
"Based on these themes, we are raising estimates and price targets for Boston Properties (NYSE: BXP) (OW) and Brookfield (NYSE: BPO) (2-EW); we are downgrading suburban office REIT Mack-Cali (CLI) to Equal Weight, from 1-Overweight. Our office coverage now includes four Overweight-rated stocks (Alexandria Real Estate (NYSE: ARE), BXP, Hudson Pacific Properties (NYSE: HPP), and Vornado Realty Trust (NYSE: VNO), four Equal Weight-rated stocks (BPO, Mack-Cali (NYSE: CLI), Douglas Emmett (NYSE: DEI) and SL Green (NYSE: SLG)) and one Underweight-rated stock Brandywine Realty (NYSE: BDN). Our price targets imply 7.5% weighted average upside for our office coverage, the highest of the core property types."
For BXP, Barclays increasing 2011 FFO estimate a penny to $4.51ps and 2012 estimate $0.06 to $5.11ps. PT increased from $101 to $107.
For BPO, Barclays maintaining 2011 FFO estimate of $1.10ps (in line with consensus), but increases 2012 estimate to $1.29ps from $1.26ps. PT raised from $17 to $19.
Barclays analyst says, "We are revising our investment view on the office subsector to positive, from neutral, based on a fundamental inflection and recovery that we do not think is fully priced into the stocks. The three key themes we expect to differentiate the office stocks include: 1) CBD markets appear poised to recover stronger/faster than suburban markets, 2) we believe Midtown Manhattan in particular is positioned to outperform expectations and 3) the planned supply increase Downtown will likely be mitigated by several factors that will drive stronger demand over time."
"Based on these themes, we are raising estimates and price targets for Boston Properties (NYSE: BXP) (OW) and Brookfield (NYSE: BPO) (2-EW); we are downgrading suburban office REIT Mack-Cali (CLI) to Equal Weight, from 1-Overweight. Our office coverage now includes four Overweight-rated stocks (Alexandria Real Estate (NYSE: ARE), BXP, Hudson Pacific Properties (NYSE: HPP), and Vornado Realty Trust (NYSE: VNO), four Equal Weight-rated stocks (BPO, Mack-Cali (NYSE: CLI), Douglas Emmett (NYSE: DEI) and SL Green (NYSE: SLG)) and one Underweight-rated stock Brandywine Realty (NYSE: BDN). Our price targets imply 7.5% weighted average upside for our office coverage, the highest of the core property types."
For BXP, Barclays increasing 2011 FFO estimate a penny to $4.51ps and 2012 estimate $0.06 to $5.11ps. PT increased from $101 to $107.
For BPO, Barclays maintaining 2011 FFO estimate of $1.10ps (in line with consensus), but increases 2012 estimate to $1.29ps from $1.26ps. PT raised from $17 to $19.
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