In the context of Boston Properties’ (BXP) propensity to beat and raise, the solid 4Q19 print, which highlighted the next two phases of development, points toward a consistent mid-single-digit earnings growth path heading into the next 3-5 years, in my view. Though I do acknowledge the company’s strong development pipeline and earnings momentum, much of the positives have little been priced into the stock - BXP trades at a premium valuation within the office REIT space, keeping me on hold. Meanwhile, further delays in Under Armour’s (UA) planned occupancy at the GM building (which BXP has a majority stake in) could also weigh on the stock going forward.

4Q19 Results Highlights

BXP reported 4Q19 funds from operations per share (FFOPS) of $1.87, ahead of consensus at $1.85, though adjusted for one-off expenses such as debt extinguishment costs for the quarter, the “core” FFO per share was closer to $1.88. On a full-year basis, core FFO per share stood at $7.19 (+12.4% YoY), ~$0.17 higher than reported FFO per share of $7.02 (+11.3%)

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