HIW - Embedded Expectations Analysis - 2020 07 30
Highwoods Properties, Inc. (HIW:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 33.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about coronavirus headwinds, payment deferrals, and their ability to meet guidanceSpecifically, management may be concerned about the adverse impact coronavirus will have on the rest of 2020 results, and may be downplaying concerns about the trends towards lower lease payments. Additionally, they may lack confidence in their ability to maintain their balance sheet, sustain their debt to adjusted EBITDA ratio, and meet their funds from operations (FFO) guidance and their same-property cash net operating income (NOI) growth outlook. Moreover, they may have concerns about the continuous decline in property utilization and payment deferrals of their office providers, restaurants, and amenity retail clients. They may also lack confidence in their ability to execute the rest of their market rotation plan, and they may have concerns about the cancellation of Transient's monthly contracts. Finally, they may lack confidence in their in-house council's ability to be responsive to customer requests
Highwoods Properties is a real estate investment trust. The company owns, develops, acquires, leases and manages properties primarily in the business districts of Atlanta, Charlotte, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa. The company's primary business is the operation, acquisition and development of office properties. The company conducts its activities through its subsidiary, Highwoods Realty Limited Partnership. The company provides a line of real estate services to its customers. The company provides its customers with services such as build-to-suit construction and space modification, including tenant improvements and expansions.
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