Alexandria Real Estate: The 45% Cut Was Necessary - The Band-Aid Has Been Ripped Off
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Julian LinInvesting Group LeaderFollow5ShareSavePlay(8min)Comment(1)SummaryAlexandria Real Estate is a distressed, high-quality life science REIT trading at a steep discount after a dividend cut and operational headwinds.ARE faces declining occupancy, pressured FFO, and elevated leverage but maintains a manageable debt maturity profile and investment-grade tenant base.Management prioritizes balance sheet strength and development pipeline over share repurchases, despite the stock’s deep undervaluation on FFO and yield metrics.I initiate coverage with a buy rating, seeing upside if management pivots to share repurchases and occupancy stabilizes, but emphasize high risk. Tom Werner/DigitalVision via Getty Images Alexandria Real Estate (ARE) is one of the biggest losers in the REIT sector. For value investors, that might be enough to warrant a look. The stock does indeed trade cheaply, but the magnitude of that cheapnessThis article was written byJulian Lin36.65K FollowersFollowJulian Lin is a financial analyst. He finds undervalued companies with secular growth that appreciate over time. His approach is to look for companies with strong balance sheets and management teams in sectors with long growth runways. Julian is the leader of the investing group Best Of Breed Growth Stocks where he only shares positions in stocks which have a large probability of delivering large alpha relative to the S&P 500. He also combines growth-oriented principles with strict valuation hurdles to add an additional layer to the conventional margin of safety. Features include: exclusive access to Julian's highest conviction picks, full stock research reports, real-time trade alerts, macro market analysis, individual industry reports, a filtered watchlist, and community chat with access to Julian 24/7. Learn more.Analyst’s Disclosure:I/we have a beneficial long position in the shares of ARE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You