Analysts raised Kilroy Realty’s price target slightly to $39.47, citing Q2 updates but remaining cautious given declining funds from operations, weak tenant retention, sector headwinds, and a lack of strong near-term catalysts.
Analyst Commentary
- Bearish analysts highlight concerns about declining annual funds from operations (projected 7% drop over three years) due to low office tenant retention and elevated office space availability in Kilroy Realty's key West Coast markets.
- Adjustments to price targets reflect sector-wide updates post-Q2, with some analysts noting only modest changes to occupancy and interest expense assumptions.
- Bearish analysts flag that Kilroy faces a challenging environment for office REITs, with high risk premiums and significant recent share outperformance raising the threshold for further gains.
- Some price target decreases are attributed to a more neutral outlook on the office sector as a whole, with limited catalysts expected in the near term.
- Bullish analysts slightly raised price targets after incorporating updated Q2 results, but overall sentiment remained cautious, with few expecting strong near-term growth.
What's in the News
- Goldman Sachs downgraded Kilroy Realty to Sell from Neutral, maintaining a $33 price target, citing an expected 7% drop in annual funds from operations over the next three years (Periodicals).
- The downgrade was attributed to low tenant retention and high office space availability in Kilroy's key West Coast markets, which are expected to limit the company's growth (Periodicals).
- From April 1, 2025 to June 30, 2025, Kilroy Realty did not repurchase any shares, completing no buybacks under the program announced in March 2024 (Key Developments).
- The company's buyback program remains unutilized with zero shares repurchased for $0 million as of the latest update (Key Developments).
- Persistent office market headwinds and cautious capital management illustrate ongoing challenges for Kilroy Realty's operational and financial strategy (Combined Sources).
Valuation Changes
Summary of Valuation Changes for Kilroy Realty
- The Consensus Analyst Price Target has risen slightly from $38.33 to $39.47.
- The Consensus Revenue Growth forecasts for Kilroy Realty has significantly fallen from 0.0% per annum to -0.2% per annum.
- The Future P/E for Kilroy Realty has risen from 87.43x to 93.22x.
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.