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Easterly Government Properties (DEA)
NYSE:DEA
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Easterly Government Properties (DEA) AI Stock Analysis

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DEA

Easterly Government Properties

(NYSE:DEA)

Rating:71Outperform
Price Target:
$25.00
▲(14.57%Upside)
Easterly Government Properties scores well due to its strategic growth initiatives and strong financial performance. The high P/E ratio and dividend reduction pose some risks, but the company's strategic positioning and solid portfolio additions provide a positive outlook.
Positive Factors
Occupancy Stability
Easterly has consistently remained over 95% leased with stable tenants largely backed by US government credit.
Strategic Expansion
DEA announced a revised strategy focused on delivering 4% annual FFOps growth, consistently — expanding its 'bullseye' of targeted acquisitions, to include assets leased to public and private, high-credit companies.
Negative Factors
Debt Levels
The company's net debt to EBITDA ratio remains elevated, and is expected to rise due to upfront development spending and investment activities.
Government Workforce Reductions
Continued reductions in the government workforce could eventually impact Easterly's portfolio, posing a risk to its tenant base.

Easterly Government Properties (DEA) vs. SPDR S&P 500 ETF (SPY)

Easterly Government Properties Business Overview & Revenue Model

Company DescriptionEasterly Government Properties, Inc. (NYSE:DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly's experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased to such agencies either directly or through the U.S. General Services Administration (GSA).
How the Company Makes MoneyEasterly Government Properties generates revenue primarily through rental income from its portfolio of government-leased properties. The company's revenue model hinges on acquiring and managing properties that are leased to U.S. Government agencies, which typically involve long-term, full-service leases. These leases provide stable and predictable cash flows due to the creditworthiness of the U.S. Government as a tenant. Key revenue streams include lease payments, which may include annual rent escalations and reimbursements for certain property expenses. Easterly's strategic focus on properties leased to government agencies reduces vacancy risks and enhances tenant stability, significantly contributing to the company's earnings.

Easterly Government Properties Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 6.65%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strategic shift with a focus on long-term growth and capital flexibility. While the dividend reduction might be seen negatively by some, the company’s strong portfolio additions, financial performance, and successful debt financing highlight its growth potential and strategic positioning in the market.
Q1-2025 Updates
Positive Updates
New Strategic Capital Allocation Strategy
Easterly announced a reduction of its quarterly dividend and a two-for-five reverse stock split to create more flexibility for growth and to free up significant capital for accretive investments.
Strong Portfolio Additions
Easterly announced two accretive additions to its portfolio: a 40,000 square foot federal courthouse in Medford, Oregon, and a 290,000 square foot facility leased to the AA+ rated District of Columbia government.
Solid Financial Performance
Net income per share was $0.07, core FFO per share was $0.73, and cash available for distribution was $31.1 million. Easterly is on track to deliver an estimated 2% to 3% core FFO per share growth in 2025.
Successful Debt Financing
Easterly raised an additional $125 million in debt capacity and increased borrowing capacity, which positions the company well for future growth.
Negative Updates
Dividend Reduction
The company reduced its quarterly dividend as part of its strategic capital allocation changes, which may be seen negatively by some investors focused on dividend yields.
Market Uncertainties
Despite no lease terminations from the Doge initiative, there remains a level of market uncertainty and potential risks associated with real estate strategies for government facilities.
Company Guidance
During the first quarter of 2025, Easterly Government Properties implemented strategic changes to enhance growth opportunities, including a two-for-five reverse stock split and a reduction in the quarterly dividend. These actions aim to align the dividend philosophy with peers, accelerate growth initiatives, and strengthen the balance sheet. Key metrics reported include a net income per share of $0.07 and core funds from operations (FFO) per share of $0.73. The company anticipates a 2% to 3% core FFO per share growth for 2025, supported by the acquisition of a 290,000 square foot facility in DC, 98% leased to the AA+ rated DC government, and a 40,000 square foot federal courthouse development in Medford, Oregon. Easterly Government Properties reported a cash available for distribution of $31.1 million and raised the bottom end of its full-year core FFO per share guidance to a range of $2.98 to $3.03, reflecting continued strong performance and strategic capital allocation.

Easterly Government Properties Financial Statement Overview

Summary
Easterly Government Properties exhibits solid financial performance with consistent revenue growth, strong cash flow management, and healthy profit margins. However, challenges in cost management and increasing debt levels need attention to ensure long-term financial health.
Income Statement
75
Positive
Easterly Government Properties shows a steady increase in revenue with a TTM revenue of $307.9M, reflecting a growth rate of 2% from the previous year. The gross profit margin is strong at 67.2%, and the net profit margin is moderate at 5.8%. EBIT and EBITDA margins are healthy at 26.3% and 60.2% respectively, indicating efficient operations. However, the net income has slightly decreased in the TTM period, suggesting potential challenges in cost management.
Balance Sheet
70
Positive
The company's balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.20, indicating moderate leverage. The equity ratio stands at 41.4%, showing a solid equity base. Return on equity is relatively low at 1.3%, suggesting limited profitability from shareholder investments. The company's assets have grown steadily, but the increasing debt levels could pose a risk if not managed carefully.
Cash Flow
80
Positive
Easterly Government Properties demonstrates strong cash flow management with a consistent operating cash flow of $162.9M in the TTM period. The free cash flow growth rate is stable, and the operating cash flow to net income ratio is robust at 9.1, indicating efficient cash generation relative to net income. The free cash flow to net income ratio is also strong at 9.1, highlighting effective cash utilization.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue302.05M287.23M293.61M274.86M245.08M
Gross Profit200.98M188.64M197.93M187.74M169.52M
EBITDA179.34M161.52M181.19M163.85M142.81M
Net Income19.55M18.20M31.47M30.06M11.96M
Balance Sheet
Total Assets3.22B2.88B2.83B2.83B2.46B
Cash, Cash Equivalents and Short-Term Investments19.35M9.38M7.58M11.13M8.46M
Total Debt1.60B1.29B1.25B1.21B978.26M
Total Liabilities1.84B1.47B1.42B1.38B1.16B
Stockholders Equity1.32B1.32B1.24B1.28B1.15B
Cash Flow
Free Cash Flow162.63M114.48M196.03M481.39M145.20M
Operating Cash Flow162.63M114.48M125.94M118.34M145.20M
Investing Cash Flow-409.64M-127.01M-69.10M-363.04M-290.18M
Financing Cash Flow252.88M17.19M-59.71M250.17M144.10M

Easterly Government Properties Technical Analysis

Technical Analysis Sentiment
Negative
Last Price21.82
Price Trends
50DMA
22.47
Negative
100DMA
22.51
Negative
200DMA
25.47
Negative
Market Momentum
MACD
-0.09
Positive
RSI
39.25
Neutral
STOCH
11.50
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DEA, the sentiment is Negative. The current price of 21.82 is below the 20-day moving average (MA) of 22.78, below the 50-day MA of 22.47, and below the 200-day MA of 25.47, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 39.25 is Neutral, neither overbought nor oversold. The STOCH value of 11.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DEA.

Easterly Government Properties Risk Analysis

Easterly Government Properties disclosed 70 risk factors in its most recent earnings report. Easterly Government 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

Easterly Government Properties Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
$979.83M52.601.32%9.35%6.06%-15.10%
66
Neutral
$1.45B-2.52%0.56%-1.68%63.27%
66
Neutral
€2.65B-3.293.48%6.30%0.91%40.79%
58
Neutral
$911.37M-4.27%6.83%-6.74%17.44%
58
Neutral
$2.59B-9.19%3.35%-11.33%-22.04%
49
Neutral
$663.76M-29.94%15.75%-3.05%-94.96%
$491.68M-10.27%1.05%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DEA
Easterly Government Properties
21.82
-9.08
-29.39%
PDM
Piedmont Office
7.32
-0.43
-5.55%
BDN
Brandywine Realty
3.81
-0.35
-8.41%
PGRE
Paramount Group
6.07
1.52
33.41%
JBGS
JBG Smith Properties
20.91
5.90
39.31%
NLOP
Net Lease Office Properties
32.89
5.25
18.99%

Easterly Government Properties Corporate Events

Shareholder Meetings
Easterly Government Properties Holds Annual Stockholder Meeting
Neutral
May 23, 2025

On May 22, 2025, Easterly Government Properties held its Annual Meeting of Stockholders, where stockholders voted on several proposals. The election of seven director nominees was approved, along with the non-binding advisory approval of executive compensation and the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

The most recent analyst rating on (DEA) stock is a Hold with a $9.50 price target. To see the full list of analyst forecasts on Easterly Government Properties stock, see the DEA Stock Forecast page.

Executive/Board Changes
Easterly Government Properties Appoints New Accounting Officer
Positive
May 19, 2025

Easterly Government Properties, Inc. announced the appointment of Brian M. Colantuoni as the principal accounting officer effective May 13, 2025. This change in leadership, with Mr. Colantuoni’s extensive experience in the real estate sector, is expected to enhance the company’s financial operations. The appointment includes a grant of restricted common stock valued at approximately $200,000, and an indemnification agreement to protect Mr. Colantuoni in his new role.

The most recent analyst rating on (DEA) stock is a Hold with a $9.50 price target. To see the full list of analyst forecasts on Easterly Government Properties stock, see the DEA Stock Forecast page.

Stock SplitBusiness Operations and StrategyRegulatory Filings and Compliance
Easterly Government Properties Reduces Authorized Shares
Neutral
May 8, 2025

On May 8, 2025, Easterly Government Properties, Inc. filed an amendment to reduce its authorized common stock shares from 200 million to 80 million, following a one-for-two and a half reverse stock split on April 28, 2025. This strategic move is likely to impact the company’s stock structure and could influence its market positioning and shareholder value.

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: Jul 25, 2025