Analyst Note| Kevin Brown |
No-moat Boston Properties reported decent first-quarter results as the end of pandemic appears to be in sight with mass vaccinations helping to develop heard immunity in the public. Companies are also starting to think about returning to the office after a tumultuous year of remote working experiment. The firm reported first-quarter funds from operations, or FFO, of $1.56 per share, 15% lower than the $1.83 in FFO during the first quarter of 2020. These results were largely in line with management’s previous guidance and are encouraging within the context of a COVID-19 crisis that has significantly dented office utilization rates. With our model already updated to reflect a near term weakness in rents and occupancy on the back of coronavirus-related challenges, we are maintaining our $108 fair value estimate for Boston Properties.