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BofA raises Highwoods Properties stock PT Due to leasing segment outperformance

Published 2024-04-29, 07:02 a/m
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On Monday, BofA Securities adjusted its price target on shares of Highwoods Properties Inc. (NYSE: NYSE:HIW), increasing it to $25.00 from the previous $23.00. The firm has decided to maintain a Neutral rating on the real estate investment trust.

The adjustment follows Highwoods Properties' recent quarterly performance, which aligned with expectations. A notable highlight from the report was the company's leasing activity, which surpassed forecasts by signing 922,000 square feet of leases. This figure represents a 32% increase above the average for the trailing four quarters, bolstered by 423,000 square feet in new leases.

In response to the strong net operating income (NOI), Highwoods Properties raised the lower end of its same-store NOI guidance by 50 basis points. Nevertheless, the company also revised its funds from operations (FFO) guidance downward by $0.03, a 0.4% decrease at the midpoint. This adjustment reflects the impact of non-core asset sales and rising interest rates. The new midpoint for FFO per share is now $3.55, which is 1% below the consensus estimates.

Despite the positive leasing results, Highwoods Properties anticipates challenges ahead. The company is preparing for several significant tenant move-outs over the course of the year and expects occupancy rates to reach their lowest point in early 2025. The maintained Neutral rating reflects the firm's position given these upcoming hurdles.

InvestingPro Insights

As Highwoods Properties Inc. (NYSE: HIW) navigates the evolving real estate market, insights from InvestingPro shed light on the company's financial health and market position. With a market capitalization of $2.78 billion and a robust gross profit margin of 67.19% over the last twelve months as of Q1 2024, Highwoods showcases a strong ability to generate earnings relative to its revenue. Additionally, the company's commitment to shareholder returns is evident through its significant dividend yield of 7.79%, a testament to its 31-year streak of consistent dividend payments.

Two InvestingPro Tips highlight the company's attractive investment profile. Firstly, Highwoods is trading at a low EBITDA valuation multiple, suggesting that its earnings before interest, taxes, depreciation, and amortization are reasonably priced relative to the market. Secondly, the company's liquid assets surpass its short-term obligations, indicating a solid financial footing to meet immediate liabilities. These factors, combined with the company's profitability over the last twelve months and a large price uptick of 51.39% over the past six months, provide a comprehensive view of its current market standing.

Interested investors can explore additional insights on Highwoods Properties with InvestingPro, which offers numerous other tips to inform investment decisions. By using the coupon code PRONEWS24, readers can receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further valuable analysis and data for a more informed investment strategy.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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