Could BXP Inc (BXP) Raise Its Target Development Yield

BXP Inc. (NYSE:BXP) is one of the 10 cheap REITs with huge upside.

On March 2, Scotiabank reduced its price target on BXP Inc. (NYSE:BXP) from $74 to $65. The firm maintained a Sector Perform rating on the stock that yields an adjusted upside potential of 25%.

Copyright: maciejbledowski / 123RF Stock Photo

The firm also revised its set of targets for all its U.S. real estate and REIT coverage based on the fourth quarter announcements. Scotiabank believes that REITs should focus on improved development yields to preserve near-term funds from operations per share, and that external expansion through acquisition-driven growth currently offers a more attractive thematic story.

On February 24, Mizuho analyst Vikram Malhotra downgraded BXP Inc. (NYSE:BXP) from an Outperform rating to a Neutral rating. The analyst reduced his price target from $79 to $62, resulting in a revised upside of more than 19%.

Malhotra said the rapid advancement of AI models could emerge as a potential disruptor for office-related jobs and, over time, demand for office real estate. While the analyst does not currently expect a direct impact on cash flows, he believes the shift could pressure valuation multiples across office REITs. He added that even modest changes in job growth could lead to structurally higher vacancy levels, ultimately limiting rent growth and creating further downside risk for the group.

BXP Inc. (NYSE:BXP) is a unified real estate investment trust that focuses on the development, ownership, and management of premier workplaces. It is also reputed for swift customer service and in-house building management expertise. The company has an impressive track record of delivering value across office, mixed-use, and residential real estate.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.

Disclosure: None. Follow Insider Monkey on Google News.