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Highwoods Properties (HIW)
NYSE:HIW
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Highwoods Properties
(NYSE:HIW)61Neutral
Positive Factors
Financial Performance
The company's FFO of $0.90 beat the consensus estimates, driven by higher property NOI.
Leasing Activity
Leasing activity increased to 1.3mn SF from 0.9mn SF in the previous quarter.
Negative Factors
Guidance
The 25e guidance is below expectations driven by lower same-store NOI and would expect shares to be under pressure.
Highwoods Properties (HIW) vs. S&P 500 (SPY)
Market Cap
$3.07B
Dividend Yield7.02%
Average Volume (3M)1.11M
Price to Earnings (P/E)30.3
Beta (1Y)1.43
Revenue Growth-0.98%
EPS Growth-32.02%
CountryUS
Employees350
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)0.94
Shares Outstanding107,623,780
10 Day Avg. Volume1,199,159
30 Day Avg. Volume1,107,333
Financial Highlights & Ratios
PEG Ratio5.95
Price to Book (P/B)N/A
Price to Sales (P/S)3.71
Price to Cash Flow (P/CF)7.40
P/FCF Ratio5.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$29.20Price Target Upside-0.82% Downside
Rating ConsensusHold
Number of Analyst Covering5
Highwoods Properties Business Overview & Revenue Model
Company DescriptionHighwoods Properties, Inc. (HIW) is a publicly traded real estate investment trust (REIT) focused on the ownership, management, leasing, and development of office properties. The company primarily operates in the Southeastern and Mid-Atlantic regions of the United States, with a strong presence in cities such as Atlanta, Tampa, Orlando, Raleigh, and Nashville. Highwoods Properties aims to provide high-quality office spaces and services to a diverse range of clients, including businesses from various industries, by maintaining and enhancing its strategically located portfolio.
How the Company Makes MoneyHighwoods Properties makes money primarily through leasing office space to tenants. The company's revenue model is based on long-term lease agreements that provide a steady stream of rental income. These leases often include provisions for annual rent increases, which help protect against inflation and contribute to revenue growth. In addition to rental income, Highwoods may generate revenue from property management fees and the sale of properties when market conditions are favorable. The company's partnerships with local governments and development projects also play a role in its earnings, as they can lead to new leasing opportunities and enhance the value of its existing properties. The focus on high-demand markets and strategic acquisitions further supports its financial performance.
Highwoods Properties Financial Statement Overview
Summary
Highwoods Properties presents a mixed financial picture. While the income statement indicates challenges with revenue and profitability, the balance sheet and cash flow statements highlight financial stability and liquidity. The company's ability to generate cash provides a safety net despite the recent decline in revenues, suggesting an opportunity to stabilize and potentially grow in the future.Income Statement
Highwoods Properties' income statement shows mixed results. The company has experienced a significant decline in total revenue for the latest annual report, leading to negative EBIT and a drastic reduction in net income. Despite these challenges, the company has maintained a positive EBITDA margin, indicating operational efficiency. However, the overall revenue growth rate appears stagnant over the years.40
Negative
Balance Sheet
The balance sheet of Highwoods Properties reveals moderate financial stability. The company has a solid equity ratio and no total debt reported in the most recent period, suggesting improved leverage. However, the return on equity has decreased due to the reduction in net income, potentially impacting future financial flexibility.60
Neutral
Cash Flow
Highwoods Properties shows strong cash flow metrics. The company has consistently generated positive operating cash flow, and the free cash flow has shown growth. The operating cash flow to net income ratio is favorable, indicating efficient cash generation relative to profits. This strong cash position supports the company's liquidity and operational resilience.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 830.02M | 834.00M | 828.93M | 768.01M | 736.90M | Gross Profit |
| 557.85M | 565.22M | 569.12M | 531.57M | 505.07M | EBIT |
| 515.94M | 224.05M | 242.35M | 237.01M | 227.29M | EBITDA |
| 474.48M | 528.51M | 283.94M | 250.93M | 232.25M | Net Income Common Stockholders |
| 102.25M | 148.72M | 58.57M | 222.18M | 261.61M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 22.41M | 25.12M | 21.36M | 23.15M | 109.32M | Total Assets |
| 6.03B | 6.00B | 6.06B | 5.70B | 5.21B | Total Debt |
| 3.29B | 3.21B | 3.20B | 2.79B | 2.47B | Net Debt |
| 3.27B | 3.19B | 3.18B | 2.77B | 2.36B | Total Liabilities |
| 3.60B | 3.52B | 3.50B | 3.08B | 2.74B | Stockholders Equity |
| 2.36B | 2.43B | 2.48B | 2.48B | 2.34B |
| Cash Flow | Free Cash Flow | |||
| 403.58M | 386.96M | 421.51M | 272.50M | 355.80M | Operating Cash Flow |
| 403.58M | 386.96M | 421.78M | 414.56M | 358.16M | Investing Cash Flow |
| -302.44M | -169.69M | -614.80M | -287.68M | 110.68M | Financing Cash Flow |
| -99.04M | -205.43M | 187.93M | -284.93M | -294.34M |
Highwoods Properties Technical Analysis
Positive
29.44
Price Trends
29.05
Positive
30.49
Negative
29.33
Positive
Market Momentum
-0.05
Negative
54.94
Neutral
56.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HIW, the sentiment is Positive. The current price of 29.44 is above the 20-day moving average (MA) of 28.81, above the 50-day MA of 29.05, and above the 200-day MA of 29.33, indicating a bullish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 54.94 is Neutral, neither overbought nor oversold. The STOCH value of 56.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HIW.
Highwoods Properties Risk Analysis
Highwoods Properties disclosed 36 risk factors in its most recent earnings report. Highwoods 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
Highwoods Properties Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $4.86B | 97.19 | 0.98% | 4.41% | 6.71% | -45.29% | |
64 Neutral | $14.58B | 907.36 | 1.32% | 1.94% | -1.30% | -80.81% | |
63 Neutral | $4.06B | 19.22 | 3.87% | 6.54% | 0.53% | -1.38% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
61 Neutral | $3.07B | 30.32 | 4.27% | 7.02% | -0.98% | -32.02% | |
60 Neutral | $11.60B | 737.50 | 0.23% | 5.88% | 4.10% | -92.47% | |
54 Neutral | $4.52B | 760.94 | 0.71% | 5.03% | 5.12% | ― |
* Real Estate Sector Average
Performance Comparison
HIW
Highwoods Properties
29.44
6.39
27.72%
BXP
Boston Properties
69.00
8.76
14.54%
CUZ
Cousins Properties
29.20
6.75
30.07%
KRC
Kilroy Realty
33.32
-0.13
-0.39%
SLG
SL Green Realty
61.96
13.98
29.14%
VNO
Vornado Realty
39.75
14.48
57.30%
Highwoods Properties Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: 3.12% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with strong leasing activity and development pipeline progress as key highlights. However, temporary declines in NOI and occupancy, along with challenges from recent asset sales and impairment charges, pose short-term challenges.Highlights
Strong Leasing Activity
Highwoods signed 1.3 million square feet of second generation space in Q4 2024, including 370,000 square feet of new leases. For the full year, new leasing volume was 1.6 million square feet, the highest in 10 years.
Development Pipeline Progress
GlenLake Three in Raleigh and Granite Park Six in Dallas saw robust leasing activity with 142,000 square feet signed in the last quarter. These projects are expected to add nearly $10 million in annual NOI upon stabilization.
Record-Setting Lease Revenue
Highwoods signed second generation leases totaling $1 billion in cash rent for the year, a record for the company, and an additional $140 million through first generation deals.
Strategic Dispositions
Highwoods sold $166 million of non-core properties in Tampa and Raleigh, generating proceeds at a cash cap rate of 7.8% on projected 2025 NOI.
Optimistic Long-Term Outlook
Highwoods projects significant upside potential from core operating portfolio, development pipeline, and future investments, with expectations of attractive acquisition opportunities in 2025.
Lowlights
Temporary NOI and Occupancy Decline
Due to anticipated large customer move-outs, Highwoods expects occupancy to dip in the first half of 2025, resulting in a temporary trough in same property cash NOI growth.
Impairment Charge in Pittsburgh
Highwoods took a $24.6 million impairment charge for 625 Liberty Avenue in Pittsburgh, reflecting challenges in selling non-core assets in secondary markets.
Dilutive Impact from Asset Sales
Recent dispositions, Century Center ground lease acquisition, and equity issuances are expected to have an approximate $0.10 dilutive impact on 2025 FFO.
Elevated Capital Expenditures
CapEx is expected to remain elevated due to strong leasing activity, impacting free cash flow and dividend coverage in the short term.
Company Guidance
During the Highwoods Properties Q4 2024 earnings call, the company provided optimistic guidance for the upcoming years, highlighting significant growth potential across several areas. They anticipate substantial upside from their core operating portfolio, with four key buildings projected to generate over $25 million in stabilized annual NOI. Additionally, their development pipeline is expected to deliver nearly $30 million in annual NOI upon stabilization. Highwoods also sees opportunities for compelling acquisitions in 2025, supported by $215 million raised through non-core dispositions and equity. For 2025, they forecast FFO of $3.26 to $3.44 per share, factoring in a short-term dilutive effect of approximately $0.10 per share from recent asset sales and equity issuance. Despite expected short-term challenges, including a projected negative 2% to 4% same property cash NOI growth, the company remains confident in its long-term trajectory, driven by strong leasing activity and strategic investments.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.