BXP (BXP) Lands Two Office Wins On A Narrative That Still Sees Undervaluation

BXP (BXP) just picked up two high profile assignments on opposite coasts, progress on its US$2b tower at 343 Madison Avenue and a consulting role on San Francisco’s Fifty at First redevelopment.

The twin project wins arrive after a choppy stretch for BXP’s equity, with the share price slipping around 7% over the past month and about 13% over 90 days, while the three year total shareholder return near 21% still points to a stronger longer run record than the five year figure, which remains down roughly 33%.

Scan how other high quality real estate and REIT operators with solid financials are priced today using our hand picked list of solid balance sheet and fundamentals (25 results) to benchmark BXP’s recent moves.

BXP’s shares have slipped while the business lands fresh marquee projects and reports growing revenue and net income. Does that recent slide still offer a favourable entry point on valuation, or has the easy upside narrowed?

Most Popular Narrative: 19% Undervalued

BXP’s most followed narrative pins fair value at $74.30, which sits well above the last close of $59.99 and frames the recent share price weakness as a discount to its long term cash generation.

Capital recycling and repositioning of older or noncore assets, including over US$1.2b of sale proceeds raised toward a US$1.9b goal and projects such as the Reservoir Place retrofit for Boston Dynamics, continue to shift the portfolio toward higher yielding uses and are likely to support future net margins and funds from operations.

See why 12 investors see BXP as 19% undervalued.

Result: Fair Value of $74.30 (UNDERVALUED)

Still, the bullish BXP story frays quickly if refinancing costs bite harder than expected or if future property sales remain more dilutive to cash flow.

Find out about the key risks to this BXP narrative.

Next Steps

Mixed messages in the BXP story can make it hard to know which way to lean, so review the numbers, pressure test your own thesis, then weigh up the 3 key rewards and 3 important warning signs.

Looking for more BXP-sized investment ideas?

If BXP has your attention, do not stop there. Broaden your watchlist now and give yourself more options before the next wave of market moves arrives.

• Target resilient balance sheets and steadier cash profiles with our hand picked 32 resilient stocks with low risk scores so you are not relying on just one story to hold your portfolio together.
• Hunt for pricing gaps where quality and valuation still line up by scanning the 32 high quality undervalued stocks before those opportunities get crowded out.
• Tap into income focused ideas that could complement BXP by reviewing our curated 8 dividend fortresses and decide which ones deserve a closer look.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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