Update shared on08 Oct 2025
Fair value Increased 3.09%Analysts have modestly raised their fair value target for Highwoods Properties from $30.75 to $31.70. This change reflects improved earnings visibility and stable risk metrics, despite persistent sector headwinds.
Analyst Commentary
Recent analyst coverage provides a mix of optimism and caution on Highwoods Properties, reflecting broader sentiment in the office REIT sector. Analysts have weighed the company's potential for sustained growth against persistent macroeconomic and sector-specific headwinds.
Bullish Takeaways
- Bullish analysts highlight better visibility to improved occupancy, supported by recent leasing activity and ongoing developments.
- There is growing confidence in upside potential from the company's development pipeline, as well as reduced risk from capitalized interest or refinancing pressures in the near term.
- Analysts see clear growth drivers for Highwoods Properties' earnings through 2027, contributing to above-average total return potential based on current valuations.
- Downside risk is perceived as below average, given the company's stable outlook and execution on strategic initiatives.
Bearish Takeaways
- Bearish analysts remain cautious about the office REIT sector overall, citing sluggish job growth and stubborn long-term interest rates.
- Despite the company's improving profile, there is concern that risk premiums appear rich, which may limit future upside in share performance.
- Some view the recent outperformance in shares as creating a high bar for continued positive surprises, especially as sector headwinds persist.
- The risk-reward profile, while slightly better than peers, is still seen as less appealing compared to other real estate sectors with more favorable dynamics.
Valuation Changes
- Fair Value Estimate has increased moderately, rising from $30.75 to $31.70 per share.
- Discount Rate has fallen slightly, moving from 8.45% to approximately 8.45%.
- Revenue Growth projection remains nearly unchanged, staying just above 3.51%.
- Net Profit Margin expectation is stable, with only a nominal reduction from about 7.71% to 7.71%.
- Future P/E Ratio has edged higher, climbing from 65.26x to 66.12x.
Disclaimer
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