COPT Defense Properties (CDP) AI Stock Analysis

• Market Cap: $7.12B
• Dividend Yield: 4.3%
• Average Volume (3M): 1.26M
• Price to Earnings (P/E): 23.5
• Beta (1Y): 0.34
• Revenue Growth: 0.06%
• EPS Growth: 8.88%
• Country: US
• Employees: 427
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Office
• EPS (TTM): 0.33
• Shares Outstanding: 113,210,594
• 10 Day Avg. Volume: 1,430,587
• 30 Day Avg. Volume: 1,255,895
• PEG Ratio: 2.10
• Price to Book (P/B): 2.06
• Price to Sales (P/S): 4.09
• P/FCF Ratio: 10.09
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 8.13
• Enterprise Value/Gross Profit: 17.63
• Enterprise Value/Ebitda: 15.19
• 1Y Price Target: $35.60
• Price Target Upside: 9.71% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $35.00 ▲(7.86% Upside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

The score is driven primarily by solid operating fundamentals and a constructive earnings outlook supported by strong occupancy/leasing and a largely pre-leased pipeline, tempered by elevated leverage and financing-cost headwinds that limit near-term FFO growth. Technicals are supportive, while valuation looks fair-to-somewhat demanding despite a healthy dividend yield.

Positive Factors

High Occupancy and Tenant Quality

Sustained high occupancy—especially 95.5% in Defense/IT—reflects mission-critical tenancy and long lease terms with government and prime contractors. That tenant mix and occupancy stability support predictable rental cash flows, low vacancy risk, and durable revenue visibility over multiple years.

Pre-leased Development Pipeline

A largely pre-leased, $450M development pipeline materially lowers lease-up and leasing risk while expanding income. With many projects fully pre-leased and incremental stabilized cash NOI expected from developments, the pipeline is a durable growth engine that converts capital into contracted future cash NOI.

Strong Cash Generation

Robust free cash flow and positive operating cash flow provide durable internal funding for dividends, development and debt service. Consistent cash generation supports a conservative payout policy (AFFO payout under 65%) and funds growth with less reliance on dilutive equity.

Negative Factors

Elevated Leverage

Higher leverage reduces financial flexibility and increases refinancing risk, especially in a higher-rate environment. With debt-to-equity near 1.9 and a trend of rising leverage, the company faces constrained capacity for opportunistic acquisitions and greater sensitivity to interest-cost shocks.

Financing-Cost Headwind to FFO

Incremental interest expense from recent issuances (e.g., $400M 5-year notes at 4.6% replacing 2.25% paper) materially compresses near-term FFO growth. This structural increase in funding costs makes reported cash returns and distributable earnings more sensitive to future rate moves and refinancing timing.

Earnings Volatility

Despite operating profitability, episodic swings (a 2023 net loss) indicate earnings and net income are exposed to timing, nonrecurring items, and administrative delays. That volatility undermines predictability of net income and complicates long-term planning for dividends and capital allocation.

COPT Defense Properties Business Overview & Revenue Model

Company Description

COPT is a REIT that owns, manages, leases, develops and selectively acquires office and data center properties. The majority of its portfolio is in locations that support the United States Government and its contractors, most of whom are engaged in national security, defense and information technology (IT) related activities servicing what the Company believes are growing, durable, priority missions (Defense/IT Locations). The Company also owns a portfolio of office properties located in select urban submarkets in the Greater Washington, DC/Baltimore region with durable Class-A office fundamentals and characteristics (Regional Office Properties). As of June 30, 2023, the Company derived 90% of its core portfolio annualized rental revenue from Defense/IT Locations and 10% from its Regional Office Properties. As of the same date and including 24 properties owned through unconsolidated joint ventures, COPT's core portfolio of 192 properties encompassed 22.9 million square feet and was 95% leased.

How the Company Makes Money

COPT Defense Properties generates revenue primarily through leasing its properties to government and defense contractors under long-term agreements. The majority of its income comes from rental payments, which are often backed by government contracts, providing a reliable cash flow. Additionally, CDP may engage in property development, enhancing its portfolio value and generating income from increased property rents. The company also benefits from partnerships with federal agencies and contractors, allowing it to align its property offerings with the specific needs of its tenants, which fosters long-term relationships and tenant retention. Furthermore, favorable government spending trends in defense and cybersecurity contribute to the stability and growth of CDP's revenue streams.

COPT Defense Properties Financial Statement Overview

Summary

Operations are solid: revenue growth over the period, strong margins, and generally good earnings-to-cash conversion. Offsetting this, results have shown volatility (including a 2023 net loss) and balance-sheet leverage is elevated (debt-to-equity ~1.86), reducing financial flexibility.

Income Statement

Revenue has expanded over the period, rising from $584M (2020) to $764M (2025), with strong growth in 2025 versus 2024. Profitability is generally solid with healthy operating profitability and strong EBITDA margins in recent years, and net margin improving to ~20% in 2025. The main blemish is earnings volatility—net income swung to a loss in 2023 despite positive operating profitability, indicating period-to-period noise and less consistent bottom-line performance.

Balance Sheet

Leverage is elevated for the profile: debt-to-equity sits around 1.86 in 2025 and has generally trended higher versus 2022, increasing balance-sheet risk. Equity is relatively stable, and returns on equity are positive again (~10% in 2025) after a negative year in 2023, which is constructive. Overall, the balance sheet looks serviceable but more debt-heavy than ideal, reducing financial flexibility.

Cash Flow

Cash generation is a strength: operating cash flow and free cash flow are both positive across the years provided, with 2025 free cash flow of ~$310M and free cash flow matching net income in that year. Cash flow coverage of earnings looks strong in 2025, supporting earnings quality. The key weakness is the sharp decline in free cash flow in 2025 versus 2024 (negative growth), showing that cash flow can fluctuate meaningfully year to year.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	763.92M	753.27M	684.98M	739.03M	664.45M
Gross Profit	431.88M	260.36M	231.23M	220.41M	209.47M
EBITDA	408.97M	369.74M	339.86M	354.46M	294.41M
Net Income	152.31M	138.93M	-73.47M	173.03M	76.54M
Balance Sheet
Total Assets	4.70B	4.25B	4.25B	4.26B	4.26B
Cash, Cash Equivalents and Short-Term Investments	274.99M	38.28M	167.82M	12.34M	13.26M
Total Debt	2.81B	2.44B	2.45B	2.26B	2.30B
Total Liabilities	3.11B	2.69B	2.70B	2.51B	2.58B
Stockholders Equity	1.51B	1.49B	1.48B	1.68B	1.62B
Cash Flow
Free Cash Flow	309.93M	299.61M	255.77M	229.45M	219.12M
Operating Cash Flow	309.93M	330.95M	276.27M	265.82M	249.15M
Investing Cash Flow	-289.74M	-291.01M	-169.62M	-83.46M	-202.97M
Financing Cash Flow	216.54M	-169.67M	46.26M	-183.18M	-50.90M

COPT Defense Properties Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 32.45
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 32.45 is above the 20-day moving average (MA) of 31.33, above the 50-day MA of 29.97, and above the 200-day MA of 28.67, indicating a bullish trend. The MACD of 0.59 indicates Positive momentum. The RSI at 64.65 is Neutral, neither overbought nor oversold. The STOCH value of 45.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CDP.

COPT Defense Properties Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CDP	71 Outperform	$7.12B	23.51	10.13%	4.30%	0.06%	8.88%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
HIW	56 Neutral	$2.54B	16.25	6.73%	7.83%	-2.10%	-13.30%
KRC	56 Neutral	$3.86B	13.93	5.09%	5.75%	0.77%	62.58%
CUZ	53 Neutral	$4.01B	99.46	0.85%	5.08%	16.38%	3.60%
SLG	48 Neutral	$2.98B	-24.38	-2.25%	6.95%	8.60%	―
DEI	45 Neutral	$1.65B	101.13	1.03%	6.45%	-0.12%	―

COPT Defense Properties Corporate Events

COPT Defense Updates Executive Severance and Change-in-Control Plan

On January 30, 2026, COPT Defense Properties and its operating partnership entered into new letter agreements with President and CEO Stephen E. Budorick, EVP and COO Britt A. Snider, and EVP and CFO Anthony Mifsud that govern their participation in the company’s Second Amended & Restated Executive Change in Control and Severance Plan. The 2026 agreements, which replace prior arrangements, set five-year participation periods for each executive and define severance terms if they are terminated without cause or are constructively discharged, including cash severance based on a multiple of salary and average bonus, pro-rated bonus for the year of termination, accelerated vesting of time-based equity awards, extended stock option exercise periods, and continued health benefits for up to two years for the CEO and one year for the other executives. The plan also specifies higher severance multiples of up to 2.99 times pay for all three executives in connection with a change in control, subject to potential reduction to avoid excise taxes, and requires executives to sign releases and comply with post-employment non-competition, non-solicitation, confidentiality and non-disparagement covenants, reinforcing management stability and protections around potential strategic transactions while preserving the company’s flexibility to amend or terminate the plan outside defined change-in-control windows.

The most recent analyst rating on (CDP) stock is a Buy with a $33.00 price target. To see the full list of analyst forecasts on COPT Defense Properties stock, see the CDP Stock Forecast page.