Balanced View on Alexandria Real Estate: Structural Strengths Offset by Earnings Headwinds and Limited Upside Justify Hold Rating

Ronald Kamdem, an analyst from Morgan Stanley, has initiated a new Hold rating on Alexandria Equities (ARE).

Ronald Kamdem has given his Hold rating due to a combination of factors tied to both valuation and operating visibility. He sees only modest upside, with an expected total return of roughly high single digits to his price target, which is derived from applying a discounted earnings multiple versus peers, reflecting Alexandria’s higher development exposure, elevated lease rollover, and more muted growth outlook. While the company’s life science portfolio has historically outperformed its markets, recent occupancy declines and negative same-store NOI trends indicate that the business is not fully insulated from broader softness. Additionally, management’s expectation that FFO could fall meaningfully by late 2026 underscores the limited visibility around when earnings will bottom.

At the same time, Kamdem acknowledges several supportive aspects that prevent a more negative stance. Alexandria is a scaled, sector-focused REIT with a strong footprint in premier innovation clusters and a tenant base he views as higher quality than some competitors. His proprietary demand work suggests life science availability will continue to drift higher, but he also notes that Alexandria’s submarkets carry lower vacancy than peers, implying relatively better positioning in a challenging environment. Balancing the structural strengths of the platform against near- to medium-term earnings pressure and a largely “priced in” risk profile leads him to conclude that a neutral, or Hold, recommendation is appropriate at the current share price.

In another report released on January 5, Cantor Fitzgerald also maintained a Hold rating on the stock with a $46.00 price target.