Piper Sandler analyst Alexander Goldfarb downgraded the rating on Alexander & Baldwin to a Hold yesterday, setting a price target of $21.00.
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Alexander Goldfarb’s rating is based on the recent announcement that Alexander & Baldwin will go private, accepting an all-cash offer of $21.20 per share. This decision reflects the company’s struggle to have its value recognized in public markets due to its Hawaiian focus and small-cap status, which made it less attractive compared to mainland investments. The offer represents a significant premium over the recent trading price, although it is below the estimated net asset value.
Goldfarb acknowledges the strategic move by the company to simplify its operations and sees the privatization as a positive outcome given the current market conditions. The involvement of local buyers and established firms like BX suggests a low likelihood of competing bids, justifying the Hold rating. The decision to downgrade from an Outperform rating reflects the alignment of the price target with the offer, considering the broader market dynamics and risks such as regulations and economic trends.