Comparing the Stock Performance of Alexandria Real Estate to Other Real Estate Equities
In the world of real estate, Alexandria Real Estate Equities, Inc. (ARE), a prominent U.S. REIT valued at $12.3 billion by market cap, has recently reported its Q2 results. Headquartered in Pasadena, California, ARE specializes in Class A/A+ lab and office campuses for life sciences, biotech, and agtech companies, owning and developing properties in top innovation clusters such as Boston, San Francisco, San Diego, Seattle, and the Research Triangle.
The Q2 report, unveiled on July 21, showed a slight decrease in FFO (Funds From Operations) per share compared to the same period last year, with ARE reporting $2.33 per share, a 1.3% decrease year-over-year. Despite this, the company's total revenues for Q2 were higher than Wall Street's estimate of $750.6 million, amounting to $762 million.
However, the stock market has not been kind to ARE in recent months. Over the past three months, the company's shares have declined 19.6%, and in the longer term, they have dipped 12.7% on a YTD basis and fallen 31.3% over the past 52 weeks. This performance has underperformed the Real Estate Select Sector SPDR Fund (XLRE).
Interestingly, ARE's competitor, Kilroy Realty Corporation (KRC), has outperformed ARE with an 8.1% increase on a YTD basis and a 13.7% rise over the past 52 weeks. Meanwhile, Realty Income Corporation has shown a better performance over the past 52 weeks with a +28.61% increase, compared to Alexandria Real Estate Equities, Inc., which had a negative performance of about -29.48% in the same period.
Despite the recent downturn, ARE has been trading above its 50-day moving average since mid-June. The mean price target for ARE is $97.50, suggesting a potential upside of 14.5% from current price levels. The company currently holds a consensus "Moderate Buy" rating from 13 analysts covering it.
Following the Q2 report, ARE's shares rose 1.3%. As the company continues to navigate the dynamic real estate market, investors will be watching closely to see how ARE recovers and whether it can regain its footing in the competitive landscape.
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