Kilroy Realty (KRC) Could Be 10% Undervalued On Raised 2026 Earnings Outlook

Kilroy Realty (KRC) reported a sharp year over year drop in quarterly profit but raised its full year earnings outlook after releasing third quarter and nine month results on 22 October 2026.

The raised full-year guidance has arrived alongside a rebound in Kilroy Realty’s trading, with the stock gaining 4.44% on a 1-day share price basis and 3.84% over 7 days. However, the 1-year total shareholder return is still down 5.50% and the 5-year total shareholder return has declined 29.60%, while the 3-year total shareholder return is up 54.93%. This points to momentum that has cooled recently after a much stronger multi-year run.

Compare Kilroy Realty’s reset expectations with other real estate investment ideas by scanning a curated group of 29 high quality undervalued stocks that currently screen as high quality on fundamentals.

Bulls point to Kilroy Realty’s higher full year earnings outlook and recent share price bounce, while bears focus on the steep profit slide. As you weigh the risk reward trade off, the question is which side the current valuation leans toward.

Most Popular Narrative: 10.4% Undervalued

Kilroy Realty last closed at $35.96, while the most followed narrative pegs fair value around $40.14. This frames the latest guidance upgrade against a modest implied discount using an 8.41% discount rate.

The current valuation implies the share price does not fully reflect the embedded cash flow from over 1,000,000 square feet of signed-but-not-commenced leases, the targeted yields at Kilroy Oyster Point Phase 2 and 1900 Broadway, and the net capital surplus generated from recent asset sales.

See why 15 investors see Kilroy Realty as 10% undervalued.

Result: Fair Value of $40.14 (UNDERVALUED)

Still, Kilroy Realty’s relatively low 77% occupancy and the large 2027 lease rollovers at DIRECTV, AT&T and Long Beach could quickly challenge that undervalued narrative.

Find out about the key risks to this Kilroy Realty narrative.

Next Steps

With mixed sentiment around Kilroy Realty’s outlook and valuation, this is a moment to move fast and test the assumptions yourself. To weigh the potential upside against the downside in one place, review the 2 key rewards and 3 important warning signs.

Looking for more Kilroy Realty style investment ideas?

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• Target potential upside by scanning a curated set of undervalued opportunities through the 29 high quality undervalued stocks.
• Anchor your income plan by reviewing companies that feature resilient payouts in the 6 dividend fortresses.
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