BXP - Embedded Expectations Analysis - 2018 08 07
Boston Properties, Inc (BXP:USA) is currently trading near recent averages relative to UAFRS-based (Uniform) Earnings, with a 36.0x Uniform P/E. At these levels, the market has very bullish expectations for the firm, while management is confident in their ability to meet or exceed fiscal year guidance, driven by strong tailwindsSpecifically, management is confident that the macroeconomic outlook will remain strong for the near future, providing strong tailwinds for the firm, and in their pricing power capabilities and their strong development pipeline. Moreover, management is confident in the performance of their recently completed Marriott project in Bethesda, and in their ability to utilize third-party capital to fund large-scale projects going forward. Finally, management generated an excitement marker when talking about their fiscal year outlook
Boston Properties is a real estate investment trust that develops, owns and manages primarily office properties. The company's properties are concentrated in five markets: Boston, Los Angeles, New York, San Francisco and Washington, DC. The company is a real estate company, with in-house knowledge and resources in acquisitions, development, financing, capital markets, construction management, property management, marketing, leasing, accounting, risk management, tax and legal services. The company manages Boston Properties Limited Partnership, which is the entity through which the company conducts substantially all of its business and owns (either directly or through subsidiaries) substantially all of its assets.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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