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ARE Dividend Reset And Buyback Will Support Long Term Recovery

Share Repurchase and Expansion Will Support Long-Term Prospects Amid Earnings Update

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ARE
AnalystConsensusTarget
Not Invested
Published 08 Aug 2024

Update shared on 11 Dec 2025

Fair value Decreased 7.91%
Previous
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AnalystConsensusTarget's Fair Value
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1Y
-51.4%
7D
2.3%

Analysts have trimmed their price target for Alexandria Real Estate Equities by roughly 8 percent to about $63 per share, citing higher perceived risk, weaker projected revenue growth, and sharply compressed profit margins. Together, these factors are seen as warranting a lower fair value multiple.

What's in the News

  • The board has authorized a new share repurchase program of up to $500 million, to be funded on a leverage neutral basis and running through December 31, 2026 (Key Developments).
  • The company reports a 45% cut to its quarterly common dividend for 4Q 2025 to $0.72 per share, signaling a major reset of its capital return policy (Key Developments).
  • Levi and Korsinsky has filed a securities class action over alleged misstatements related to the LIC life science property, with a lead plaintiff deadline of January 26, 2026 (Key Developments).
  • Third quarter 2025 results include a sharp increase in real estate impairment charges to $323.9 million from $5.7 million a year earlier, pressuring reported earnings (Key Developments).
  • Full year 2025 net income guidance midpoint has been cut from a profit of $0.50 per share to a loss of $2.94 per share, underscoring weaker fundamentals (Key Developments).

Valuation Changes

  • Fair Value: Trimmed modestly from approximately $68.50 to about $63.08 per share (an 8 percent reduction in the estimated intrinsic value).
  • Discount Rate: Risen slightly from about 9.54 percent to roughly 9.86 percent, reflecting a modestly higher required return and perceived risk.
  • Revenue Growth: Projected decline has deepened, with the long term revenue growth rate moving from approximately negative 0.27 percent to about negative 1.39 percent.
  • Net Profit Margin: Compressed sharply from roughly 7.46 percent to close to 0.11 percent, indicating much weaker expected profitability.
  • Future P/E: Expanded dramatically from about 68.5x to more than 4,470x, signaling that earnings expectations have fallen far faster than the share price in the model.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.