Brandywine Realty (BDN) AI Stock Analysis

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Brandywine Realty

(NYSE:BDN)

54Neutral

Brandywine Realty's overall stock score reflects significant financial and operational challenges, evident from weak profitability and operational inefficiencies. Despite strong leasing activity and improved liquidity highlighted in the earnings call, technical analysis indicates bearish sentiment, and the valuation presents a mixed picture. These factors contribute to a moderate score, underscoring the need for caution in investment decisions.

Brandywine Realty (BDN) vs. S&P 500 (SPY)

Market Cap

$694.35M

Dividend Yield15%

Average Volume (3M)2.33M

Price to Earnings (P/E)―

Beta (1Y)1.51

Revenue Growth-1.77%

EPS Growth1.20%

CountryUS

Employees285

SectorReal Estate

Sector Strength79

IndustryREIT - Office

Share Statistics

EPS (TTM)-1.14

Shares Outstanding173,070,660

10 Day Avg. Volume2,144,298

30 Day Avg. Volume2,334,831

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.53

Price to Cash Flow (P/CF)3.40

P/FCF Ratio2.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$5.50

Price Target Upside37.50% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

Brandywine Realty Business Overview & Revenue Model

Company DescriptionBrandywine Realty Trust (BDN) is a publicly traded real estate investment trust (REIT) that specializes in the ownership, management, and development of urban, town center, and transit-oriented office properties. With a strong presence in the Philadelphia, Washington D.C., and Austin markets, Brandywine Realty is committed to delivering high-quality, sustainable office environments that cater to a diverse range of tenants seeking prime real estate locations.

How the Company Makes MoneyBrandywine Realty Trust generates revenue primarily through leasing office space to a variety of tenants. This includes long-term leases that provide stable and predictable cash flows. The company's revenue model is largely dependent on occupancy rates, rental rates, and lease renewals or new lease agreements within its property portfolio. Additionally, Brandywine engages in the strategic acquisition and development of properties, enhancing its asset base and potential income. Another significant revenue stream comes from the sale of properties, which the company occasionally undertakes to optimize its portfolio. Partnerships with other real estate entities or investment firms can also contribute to revenue, particularly in joint development projects or property management contracts.

Brandywine Realty Financial Statement Overview

Summary

Brandywine Realty faces significant financial challenges. The income statement is hindered by declining profitability and operational inefficiencies. While the balance sheet shows improved leverage due to zero debt, equity and profitability metrics are weak. Cash flow generation is positive but inconsistent, reflecting operational challenges. Overall, the company needs to address profitability and operational efficiency to improve its financial health.

Income Statement

Neutral

Brandywine Realty's income statement reveals challenges with profitability. The gross profit margin is relatively healthy, but the company has experienced a net loss in the most recent TTM period, which negatively impacts the net profit margin. The revenue has shown slight fluctuations, but a significant decrease in EBIT and negative EBITDA in the TTM period indicate operational difficulties. Overall, the income statement suggests limited profitability and operational efficiency issues.

Balance Sheet

Neutral

The balance sheet presents a mixed picture. The company has reduced its total debt to zero in the TTM period, which is a positive sign of improved financial stability. However, the stockholders' equity has decreased, which affects the equity ratio. Return on equity has been negative recently due to net losses, reflecting inefficiencies in generating shareholder returns. Despite the reduction in debt, the company's equity position has weakened.

Cash Flow

Neutral

Cash flow analysis shows some concerns. The operating cash flow remains positive, indicating some ability to generate cash from operations. However, free cash flow has been inconsistent, with fluctuations that indicate challenges in maintaining stable cash flow generation. The free cash flow to net income ratio is affected by net losses, suggesting inefficiencies in converting income to cash flow. The overall cash flow position is stable but not strong.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
505.52M	514.65M	506.10M	486.82M	534.85M
	Gross Profit
318.19M	324.70M	311.70M	298.51M	329.40M
	EBIT
54.88M	-21.58M	119.73M	71.98M	91.35M
	EBITDA
103.00M	91.29M	276.69M	250.09M	279.63M
	Net Income Common Stockholders
-195.91M	-197.36M	53.82M	12.29M	305.53M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
90.23M	58.32M	17.55M	27.46M	46.34M
	Total Assets
3.49B	3.73B	3.87B	3.85B	3.90B
	Total Debt
2.24B	2.16B	1.99B	1.88B	1.85B
	Net Debt
2.15B	2.10B	1.97B	1.85B	1.81B
	Total Liabilities
2.45B	2.41B	2.24B	2.14B	2.10B
	Stockholders Equity
1.04B	1.32B	1.63B	1.69B	1.79B
Cash Flow		Free Cash Flow
51.37M	20.81M	-53.71M	55.75M	65.56M
	Operating Cash Flow
181.13M	177.27M	209.31M	190.87M	225.81M
	Investing Cash Flow
-120.19M	-174.91M	-190.59M	-100.31M	18.29M
	Financing Cash Flow
-32.30M	46.79M	-28.63M	-109.34M	-288.19M

Brandywine Realty Technical Analysis

Technical Analysis Sentiment

Negative

Last Price4.00

Price Trends

50DMA

4.64

Negative

100DMA

4.90

Negative

200DMA

4.80

Negative

Market Momentum

MACD

-0.11

Negative

RSI

38.30

Neutral

STOCH

25.82

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BDN, the sentiment is Negative. The current price of 4 is below the 20-day moving average (MA) of 4.34, below the 50-day MA of 4.64, and below the 200-day MA of 4.80, indicating a bearish trend. The MACD of -0.11 indicates Negative momentum. The RSI at 38.30 is Neutral, neither overbought nor oversold. The STOCH value of 25.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BDN.

Brandywine Realty Risk Analysis

Brandywine Realty disclosed 47 risk factors in its most recent earnings report. Brandywine Realty reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Brandywine Realty Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARE	65 Neutral	$14.07B	45.18	1.70%	6.45%	7.99%	232.16%
Sector *	61 Neutral	$4.43B	16.13	-3.23%	11.37%	6.25%	-21.19%
BXP	60 Neutral	$10.51B	668.36	0.23%	6.49%	4.10%	-92.47%
VNO	58 Neutral	$12.60B	783.85	1.32%	2.24%	-1.30%	-80.81%
HIW	55 Neutral	$2.92B	28.87	4.27%	7.37%	-0.98%	-32.02%
BDN	54 Neutral	$694.35M	―	-16.61%	15.00%	-1.77%	1.20%
SLG	52 Neutral	$3.82B	644.15	0.71%	5.98%	5.12%	―

* Real Estate Sector Average

Performance Comparison

BDN

Brandywine Realty

4.00

0.06

1.52%

ARE

Alexandria Equities

81.28

-39.31

-32.60%

BXP

Boston Properties

60.42

0.64

1.07%

HIW

Highwoods Properties

27.13

3.49

14.76%

SLG

SL Green Realty

50.63

-0.71

-1.38%

VNO

Vornado Realty

33.00

4.64

16.36%

Brandywine Realty Earnings Call Summary

Earnings Call Date: Feb 4, 2025 | % Change Since: -22.78% | Next Earnings Date: Apr 22, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture. While there were significant achievements in leasing activity, liquidity improvement, and successful joint venture recapitalizations, the company faced challenges with missing FFO targets, development delays, and negative rent spread expectations. The overall sentiment is balanced, with positive progress tempered by notable financial and operational hurdles.

Highlights

Strong Leasing Activity

Leasing activity for the year approximated 2.3 million square feet, including 783,000 square feet in the fourth quarter, which was the highest in 2024 and 42% above the corresponding fourth quarter in 2023.

Improved Liquidity

Completed over $300 million of dispositions, well above the $150 million revised midpoint and the $90 million original guidance, with $90 million cash on hand and no outstanding balance on the $600 million unsecured line of credit.

Occupancy and Leasing Rates

The wholly owned core portfolio is 87.8% occupied and 89.9% leased, with less than 5% annual rollover through 2026.

Successful Recapitalization

Recapitalized and exited several operating joint ventures, reducing attribution by $229 million, far exceeding the $100 million goal.

Key Lease Achievements

3025 office project in Schuylkill Yards now 83% leased, and residential component sits at 84% leased.

Lowlights

FFO Target Miss

Fell short of FFO targets, with FFO results at $0.17 for the fourth quarter and $0.85 for 2024, impacted by $0.03 per share of reduced other income and $0.01 per share net dilution.

Development Delays

Leasing update taking longer than anticipated, with earnings trough expected in 2025 due to expensing of preferred coupon payments and interest expenses.

Significant Carry Costs

2025 expected to have a CAD payout ratio of 120% to 150% due to deferred tenant allowance payments, impacting cash flow.

Negative Rent Spread Expectations

Expected negative rent spreads in 2025, primarily due to leasing challenges in Austin.

Suburban Austin and DC Area Challenges

Underperformance in suburban Austin and DC area joint ventures, with non-cash impairment charges totaling $23.8 million.

Company Guidance

During the Brandywine Realty Trust fourth quarter 2024 earnings call, the company provided guidance for 2025, acknowledging it as a transitional year with expected FFO between $0.60 and $0.72 per share, primarily due to development project expenses and interest charges. Key metrics included an 87.8% occupancy and 89.9% lease rate for their core portfolio, surpassing the 2024 spec revenue target by 8% to reach $26.4 million, and achieving a tenant retention rate of 63% against a target of 51-53%. Leasing activity amounted to 2.3 million square feet for the year, with a notable 42% increase in the fourth quarter over Q4 2023. The company emphasized liquidity improvements, surpassing their asset disposition goal by achieving over $300 million in sales, having $90 million in cash, and no balance on their $600 million credit line. Despite an FFO shortfall, Brandywine anticipates improved leasing momentum and market conditions in Philadelphia and Austin, highlighting strong pipelines and minimal tenant expiration risks through 2026.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.