Balanced Risk-Reward Amid Mixed Fundamentals and Uncertain Demand Supports Hold on Alexandria Real Estate Equities

Bank of America Securities analyst Farrell Granath reiterated a Hold rating on Alexandria Equities today and set a price target of $61.00.

Farrell Granath has given his Hold rating due to a combination of factors tied to Alexandria Real Estate Equities’ mixed fundamental profile and still‑uncertain demand backdrop. The company’s latest quarter technically exceeded earnings expectations, but this outperformance was largely driven by non‑recurring fees rather than a broad‑based improvement in core operations. While management reaffirmed forward guidance and maintained a disciplined, measured tone despite more optimistic biotech headlines, Granath concludes that visibility into a sustained recovery in underlying tenant demand remains limited, warranting a neutral stance and only a modest increase in the price objective.

Farrell Granath’s rating is based on the view that recent operational positives are offset by structural pressures in the leasing environment. Leasing volumes have picked up sequentially and show early signs of improvement, yet they remain below pre‑pandemic norms and rely heavily on generous concessions such as elevated free‑rent periods, higher tenant improvement costs, and weaker re‑leasing spreads, highlighting landlords’ reduced pricing power. At the same time, disposition activity has improved and is tracking well ahead of prior expectations, providing important funding for Alexandria’s ongoing campus development pipeline and supporting the long‑term growth story. Balancing these encouraging trends against continued market oversupply and tenant‑friendly conditions, Granath judges that the risk‑reward profile is fairly balanced at current levels, supporting a Hold rather than a more bullish recommendation.

In another report released yesterday, TipRanks – Google also downgraded the stock to a Hold with a $62.00 price target.