Compass Point Upgrades Boston Properties Inc. (BXP) to Buy

Compass Point analyst Floris van Dijkum upgraded Boston Properties Inc. (NYSE: BXP) from Neutral to Buy with a price target of $88.00 (from $80.00).

The analyst comments: "We are upgrading BXP to Buy with an $88 PT as this blue chip office has lagged its two Manhattan focused office peers by +30% YTD, despite having a better balance sheet and higher average quality office portfolio. As an investment grade credit, BXP has continuous access to the unsecured debt markets. Its fixed charge coverage of 3x is twice its covenant, unlike NYC peers who are within half a turn, and BXP's three-year estimated cash liquidity of $1.9 billion is the highest in the sector. While we believe BXP's West Coast office exposure has held back shares due to weaker office fundamentals, we believe a slow rebound in tech demand, largely spurred by AI, could help tech leasing demand increase from admittedly low recent levels. We estimate that the West Coast office recovery is approximately 18-24 months behind Manhattan and Boston, two key markets for BXP. Moreover, with wider market exposure, BXP should have a greater opportunity to invest in distressed high quality office, despite the fact that few of these buildings have transacted to date. The company trades at a four turn FFO multiple discount to office peers while its NAV premium of 13% is also lowest. With a 6.9% implied yield, BXP represents the best relative value in our office coverage at this stage."

For an analyst ratings summary and ratings history on Boston Properties Inc. click here. For more ratings news on Boston Properties Inc. click here.

Shares of Boston Properties Inc. closed at $79.39 yesterday.

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