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Copt Defense Properties (CDP)
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COPT Defense Properties (CDP) AI Stock Analysis

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CDP

COPT Defense Properties

(NYSE:CDP)

Rating:71Outperform
Price Target:
$31.00
▲(11.27% Upside)
COPT Defense Properties maintains a robust financial position with strong operational margins and cash flow efficiency, which are positively supported by an optimistic earnings call and shareholder confidence. However, the technical analysis indicates a neutral position with slightly bearish momentum, and the valuation suggests the stock is relatively expensive for its sector. These factors combined result in a moderately positive overall stock score.
Positive Factors
Defense Spending
Higher defense spending allocations directly align with missions at CDP's core clusters.
Leasing Performance
CDP executed 233k SF of vacancy leasing, the highest in 11 quarters, and achieved a tenant retention rate of 89.7%.
Negative Factors
Cash Rent Spreads
Cash rent spreads declined to -0.9% vs. -0.2% in Q4.
Construction Costs
Tariffs and supply chain issues could affect construction costs, posing a challenge for CDP's development projects.

COPT Defense Properties (CDP) vs. SPDR S&P 500 ETF (SPY)

COPT Defense Properties Business Overview & Revenue Model

Company DescriptionCOPT Defense Properties (CDP) is a real estate investment trust (REIT) that specializes in owning, managing, and leasing properties primarily used by the United States government and its contractors, particularly those engaged in defense, aerospace, and cybersecurity. The company's portfolio includes strategically located office and data center properties, often situated in proximity to defense installations, government agencies, and other secure facilities.
How the Company Makes MoneyCOPT Defense Properties generates revenue primarily through leasing its properties to government agencies and defense contractors. The company benefits from long-term leases and stable occupancy rates due to the specialized nature of its properties and the critical services provided by its tenants. Revenue streams include rental income from office and data center space, as well as property management fees. Significant partnerships with government entities and defense firms contribute to its earnings, providing a reliable and consistent cash flow.

COPT Defense Properties Earnings Call Summary

Earnings Call Date:Jul 28, 2025
(Q2-2025)
|
% Change Since: -0.32%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call conveyed a positive sentiment overall, driven by strong leasing performance, increased defense spending, and improved financial metrics. Despite some challenges such as declining cash rent spreads and project delays, the company's outlook remains optimistic with anticipated opportunities in defense-related projects.
Q2-2025 Updates
Positive Updates
Record Leasing Performance
The company signed 353,000 square feet of vacancy leasing during the first half of the year, achieving 88% of the initial full-year target. Tenant retention was strong at 90% for the quarter and 82% year-to-date, with a total portfolio lease rate of 95.6%, the highest in nearly 20 years.
Increase in Defense Spending
The One Big Beautiful Bill Act appropriates an additional $150 billion to Defense spending over 4 years, with $113 billion allocated to 2026. This provides a positive backdrop for future business strength.
Guidance Increase
Based on strong performance, the company increased the midpoint of FFO per share by $0.01, increased same-property cash NOI growth by 50 basis points, and increased the full-year target for vacancy leasing by 50,000 square feet.
Strong Financial Performance
FFO per share as adjusted was $0.68, $0.02 above the midpoint of guidance, representing a 6.3% increase year-over-year.
Positive Outlook for 2026
Expectations are high for 2026, with anticipated strong defense spending and potential new opportunities related to the Golden Dome project and Space Command.
Negative Updates
Cash Rent Spreads Decline
Cash rent spreads on renewal leasing were down 3.1% during the quarter, mainly influenced by two significant leases which saw roll-downs in rent.
Project Delays
The commencement of one preleased data center shell has been delayed from Q3 to Q4 due to permit issues.
Vacancy in Baltimore
The bulk of vacancy in the 'other' segment is concentrated in a single property, 100 Light Street in Baltimore, accounting for 15% of the unleased space in the entire portfolio.
Company Guidance
During the COPT Defense Properties Second Quarter 2025 Results Conference Call, the company provided revised guidance reflecting their strong performance in the first half of the year. They increased the midpoint of their FFO per share guidance by $0.01 and raised the same-property cash NOI growth midpoint by 50 basis points. Tenant retention midpoint was also increased to 82.5%, and the full-year target for vacancy leasing was raised by 50,000 square feet. Additionally, the call highlighted the impact of the recent defense budget appropriation, with a significant $150 billion increase over four years, emphasizing future opportunities stemming from projects like the Golden Dome missile defense shield. The company also anticipates strong tailwinds from the heightened defense spending, expecting sustained demand for facility solutions that support key defense initiatives.

COPT Defense Properties Financial Statement Overview

Summary
COPT Defense Properties exhibits strong operational margins and cash flow efficiency, with robust Gross Profit and steady profitability metrics. The negative revenue growth and moderate leverage are offset by solid cash flow and operational efficiency.
Income Statement
78
Positive
COPT Defense Properties shows a solid revenue base with a TTM (Trailing-Twelve-Months) Gross Profit Margin of approximately 50.8% and a Net Profit Margin of 18.9%. However, the Revenue Growth Rate is negative at -0.7% in the latest period, indicating a slight decline. The EBIT and EBITDA margins remain strong at 29.1% and 50.9% respectively, showcasing operational efficiency despite revenue challenges.
Balance Sheet
70
Positive
The company maintains a Debt-to-Equity Ratio of 1.65, which implies moderate leverage typical for the REIT industry. The Return on Equity (ROE) is healthy at 9.5%, reflecting reasonable profitability. The Equity Ratio stands at 35.1%, indicating a balanced approach between debt and equity financing, although slightly lower than ideal for risk mitigation.
Cash Flow
82
Very Positive
Free Cash Flow remains robust with a TTM Free Cash Flow of $286.98M, though it has seen a slight decline from the previous year's $299.61M, resulting in a -4.2% growth rate. The Operating Cash Flow to Net Income Ratio is strong at 2.35, indicating efficient cash conversion. The Free Cash Flow to Net Income Ratio is also solid at 2.04, suggesting good cash flow generation relative to profits.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue753.27M684.98M739.03M664.45M609.37M
Gross Profit260.36M231.23M220.41M209.47M199.72M
EBITDA367.04M337.49M354.46M320.44M303.48M
Net Income138.93M-73.47M173.03M76.54M97.37M
Balance Sheet
Total Assets4.25B4.25B4.26B4.26B4.08B
Cash, Cash Equivalents and Short-Term Investments38.28M167.82M12.34M13.26M18.37M
Total Debt2.44B2.45B2.26B2.30B2.12B
Total Liabilities2.69B2.70B2.51B2.58B2.36B
Stockholders Equity1.49B1.48B1.68B1.62B1.66B
Cash Flow
Free Cash Flow299.61M255.77M229.45M219.12M205.67M
Operating Cash Flow330.95M276.27M265.82M249.15M238.42M
Investing Cash Flow-291.01M-169.62M-83.46M-202.97M-325.79M
Financing Cash Flow-169.67M46.26M-183.18M-50.90M91.27M

COPT Defense Properties Technical Analysis

Technical Analysis Sentiment
Positive
Last Price27.86
Price Trends
50DMA
27.85
Positive
100DMA
27.04
Positive
200DMA
28.26
Negative
Market Momentum
MACD
-0.06
Positive
RSI
53.27
Neutral
STOCH
47.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CDP, the sentiment is Positive. The current price of 27.86 is below the 20-day moving average (MA) of 27.92, above the 50-day MA of 27.85, and below the 200-day MA of 28.26, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 53.27 is Neutral, neither overbought nor oversold. The STOCH value of 47.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CDP.

COPT Defense Properties Risk Analysis

COPT Defense Properties disclosed 40 risk factors in its most recent earnings report. COPT Defense Properties 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

COPT Defense Properties Peers Comparison

Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$4.52B20.534.06%5.91%2.26%10.15%
72
Outperform
$3.09B24.395.39%6.99%-2.08%-16.41%
71
Outperform
$6.32B22.069.67%4.40%2.95%
63
Neutral
$3.07B46.851.76%5.03%-1.98%
60
Neutral
$4.48B72.321.30%4.82%13.07%-4.94%
58
Neutral
$4.22B663.10-0.35%5.49%14.21%79.46%
53
Neutral
$1.19B3.49-2.19%6.01%-2.24%-167.40%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CDP
COPT Defense Properties
28.01
0.46
1.67%
CUZ
Cousins Properties
26.70
0.64
2.46%
DEI
Douglas Emmett
15.12
0.54
3.70%
HIW
Highwoods Properties
28.56
-0.02
-0.07%
KRC
Kilroy Realty
37.82
6.53
20.87%
SLG
SL Green Realty
55.47
-3.92
-6.60%

COPT Defense Properties Corporate Events

Executive/Board ChangesShareholder Meetings
COPT Defense Properties Holds Successful Shareholder Meeting
Positive
May 23, 2025

On May 20, 2025, COPT Defense Properties held its Annual Meeting of Shareholders, where key proposals were voted on, including the election of eight trustees, approval of executive compensation, and the ratification of PricewaterhouseCoopers LLP as the independent accounting firm. The results showed strong support for all proposals, indicating shareholder confidence in the company’s leadership and strategic direction.

The most recent analyst rating on (CDP) stock is a Hold with a $31.00 price target. To see the full list of analyst forecasts on COPT Defense Properties stock, see the CDP Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 05, 2025