Kilroy Realty (KRC): Assessing Valuation After Jefferies Boosts Outlook on San Francisco AI Demand

Jefferies’ recent upgrade for Kilroy Realty (KRC) followed a positive shift in the company’s outlook. Kilroy’s large presence in San Francisco’s expanding artificial intelligence sector, along with higher tenant demand since last year, is drawing investor attention.

See our latest analysis for Kilroy Realty.

Momentum seems to be building for Kilroy Realty, as optimism around its AI-driven San Francisco assets and a notable analyst upgrade have given the stock a boost in recent months. After some volatility, the share price has gained 10.67% over the past 90 days, contributing to a solid 7.18% total return for shareholders over the last year. This highlights improving sentiment and renewed confidence in the company’s long-term prospects.

If Kilroy’s resurgence has you thinking about what other growth stories might be unfolding, now's the perfect moment to discover fast growing stocks with high insider ownership

With shares still trading at a modest discount to analyst targets, investors may be wondering whether Kilroy Realty’s growth potential is fully reflected in its price, or if there is still a buying opportunity ahead.

Most Popular Narrative: 3.7% Undervalued

With Kilroy Realty’s fair value estimated at $42.13, just ahead of the last close at $40.57, analysts suggest there's a slight margin for upside, but the story is more nuanced than a simple bargain call.

The accelerated recovery and leasing momentum in key West Coast markets, especially in San Francisco with a surge in AI-driven tenant demand and tour activity, could drive revenue growth and occupancy stabilization, supporting higher long-term cash flows.

Read the complete narrative.

Curious what’s driving bullish analysts to their fair value? The narrative leans on bold assumptions such as dramatic changes in revenue and future earnings multiples. Uncover why this fair value rides on projections few would expect.

Result: Fair Value of $42.13 (UNDERVALUED)

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

However, robust recovery in West Coast leasing and Kilroy’s pivot toward high-value innovation hubs could help offset lingering pressures facing office landlords.

Find out about the key risks to this Kilroy Realty narrative.

Build Your Own Kilroy Realty Narrative

If you think the numbers tell a different story, or you enjoy digging into the details yourself, it only takes a few minutes to craft your own Kilroy Realty outlook and interpretation. Do it your way

A great starting point for your Kilroy Realty research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

Looking for More Smart Investment Moves?

Don’t let standout opportunities slip by. The Simply Wall Street screener can unveil unique stocks that fit your goals and could reshape your portfolio’s future.

• Capture exciting growth by reviewing these 3559 penny stocks with strong financials, which have proven financial strength and momentum in emerging sectors.
• Stay ahead of financial innovation and uncover potential leaders by checking out these 79 cryptocurrency and blockchain stocks, making waves in digital assets and blockchain solutions.
• Tap into life-changing medical breakthroughs and see these 33 healthcare AI stocks reshaping the future of healthcare through artificial intelligence.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com