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BXP Inc BXP

Morningstar Rating
$67.50 +2.25 (3.45%)
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Company Report

Most REITs in the US Are Trading at Significant Discounts to Fair Value

The US REIT sector remains significantly undervalued, in our perspective. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past two years, with many REITs reaching historical levels of net operating income growth, the sector has underperformed the broader equity markets over the past two years. We believe that the cause has been the sector’s negative correlation with interest rates as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, we don’t believe that higher rates significantly change our fair value estimates for the sector. Additionally, interest rates are down from the October 2023 highs, and REIT share prices have generally inversely followed the movements of the US 10-year Treasury.

Price vs Fair Value

BXP is trading at a 878% premium.
Price
$65.23
Fair Value
$11.00
Uncertainty
High
1-Star Price
$379.74
5-Star Price
$11.50
Economic Moat
Ldjyg
Capital Allocation
Htzjvtk

Bulls Say, Bears Say

Bulls

Boston Properties owns premier properties in supply-constrained cities that have favorable regional dynamics and strong growth prospects. Additionally, the life sciences portfolio of the company should benefit from the strong demand in the burgeoning sector.

Bears

Employees are still reluctant to return to the office as physical building occupancy rates remain at approximately 50% of the prepandemic level.

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News

Trading Information

Previous Close Price
$65.25
Day Range
$66.3067.53
52-Week Range
$50.7073.97
Bid/Ask
$67.39 / $67.49
Market Cap
$10.60 Bil
Volume/Avg
589,397 / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
23.31
Price/Sales
3.10
Dividend Yield (Trailing)
6.01%
Dividend Yield (Forward)
6.01%
Total Yield
6.01%

Company Profile

BXP Inc owns over 190 properties consisting of approximately 53 million rentable square feet of space. The portfolio is dominated by office buildings and is spread across major cities such as New York, Boston, San Francisco, Los Angeles, Seattle, and the Washington, D.C., region. The real estate investment trust also owns limited retail, hotel, and residential properties.
Sector
Real Estate
Industry
REIT - Office
Stock Style Box
Small Core
Total Number of Employees
836

Competitors

Valuation

Metric
BXP
ESRT
VNO
Price/Earnings (Normalized)
23.3152.28120.52
Price/Book Value
1.751.681.26
Price/Sales
3.103.573.05
Price/Cash Flow
7.019.898.37
Price/Earnings
BXP
ESRT
VNO

Financial Strength

Metric
BXP
ESRT
VNO
Quick Ratio
3.441.151.68
Current Ratio
3.541.241.98
Interest Coverage
1.361.690.98
Quick Ratio
BXP
ESRT
VNO

Profitability

Metric
BXP
ESRT
VNO
Return on Assets (Normalized)
1.33%2.17%0.21%
Return on Equity (Normalized)
5.67%9.34%0.77%
Return on Invested Capital (Normalized)
3.14%4.33%1.65%
Return on Assets
BXP
ESRT
VNO
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REIT - Office Industry Comparables

1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Alexandria Real Estate Equities Inc
ARE
HxcyjlxlXmdd$21.8 Bil
Gecina Nom
GECFF
Fyyzk$7.1 Bil
Nippon Building Fund Inc
NBFJF
Twksgs$5.9 Bil
Vornado Realty Trust
VNO
XzvgdnrxXcpd$5.5 Bil
Merlin Properties SOCIMI SA
MRPRF
Pqpx$5.4 Bil
Mapletree Pan Asia Commercial Trust Units Real Estate Investment Trust Reg
MPCMF
Mqcjh$5.0 Bil
Dexus
DEXSF
Jphslk$4.8 Bil
Kilroy Realty Corp
KRC
JfpppcfsqYdxf$4.0 Bil
SL Green Realty Corp
SLG
VbpfhbdzHdyr$3.9 Bil

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