Alexandria Real Estate Equities (ARE) Valuation After Dividend Cut, Weak Q3 Results and Share Price Slump

Alexandria Real Estate Equities (ARE) is back on investors radar following a 45% dividend cut, weak third quarter results, and a sharp share price drop that has already attracted several securities class action lawsuits.

See our latest analysis for Alexandria Real Estate Equities.

The latest selloff has pushed Alexandria Real Estate Equities’ share price down to about $44.97, with a steep year to date share price return of around minus 53.9% and a five year total shareholder return of roughly minus 68.3%. This shows negative momentum despite the new buyback plan and efforts to shore up the balance sheet.

If the dividend cut has you rethinking your income ideas, this could be a good moment to compare Alexandria with other specialised landlords exposed to healthcare demand using healthcare stocks.

With the shares now trading at a deep discount to analyst targets and the dividend reset to a lower base, are investors being paid to take on temporary pain here, or is the market correctly pricing in weaker growth ahead?

Most Popular Narrative: 34.4% Undervalued

With Alexandria Real Estate Equities last closing at $44.97 against a most-followed fair value of $68.50, the narrative argues the selloff has overshot fundamentals.

The analysts have a consensus price target of $96.417 for Alexandria Real Estate Equities based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $144.0, and the most bearish reporting a price target of just $71.0.

Read the complete narrative.

Want to see what kind of earnings rebound could justify such a wide price target range? The narrative leans on a sharp profit swing and a premium future multiple. Curious which specific margin and cash flow assumptions pull today’s price far below its stated fair value? Read on to uncover the full logic behind that gap.

Result: Fair Value of $68.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, stubbornly high interest rates and sustained biotech funding weakness could prolong leasing softness, undermine occupancy, and derail the anticipated earnings recovery narrative.

Find out about the key risks to this Alexandria Real Estate Equities narrative.

Build Your Own Alexandria Real Estate Equities Narrative

If you see the story differently or want to test your own assumptions against the numbers, you can build a custom view in minutes: Do it your way.

A great starting point for your Alexandria Real Estate Equities research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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