On Monday, Piper Sandler maintained a Neutral stance on Alexander & Baldwin (NYSE:ALEX), a real estate investment trust (REIT) focused on Hawaiian properties, with a consistent price target of $17.00. The firm acknowledged the positive shift in investor sentiment towards the company's transformation into a dedicated Hawaiian REIT, a process that has spanned the last decade.
Alexander & Baldwin has made significant strides by divesting from its former paving business, Grace, and progressing in the development of its historic sugar plantation lands. These efforts have allowed management to pivot towards growth strategies, a move that has been well-received by institutional investors during recent meetings.
The perception of Hawaii among REIT investors has evolved substantially compared to over a decade ago, when the region was primarily considered for hotel investments.
Now, the success of various real estate projects, such as the Ward Village condos by HHH and DEI's office-to-residential conversions, along with Alexander & Baldwin's demonstration of the logistical necessities of the islands, have contributed to a broader investment appeal.
InvestingPro Insights
Piper Sandler's neutral outlook on Alexander & Baldwin is matched by a mix of caution and optimism reflected in the latest InvestingPro data and tips. With a market capitalization of $1.23 billion and a P/E ratio that has adjusted to 21.59 in the last twelve months as of Q1 2024, ALEX shows signs of being valued reasonably in relation to its near-term earnings growth potential. This is further supported by a PEG Ratio of 0.13, indicating that the company may be undervalued based on its earnings growth.
Investors should note that Alexander & Baldwin has consistently raised its dividend for the last three years, with a current dividend yield of 5.24%, a compelling factor for income-focused portfolios. Additionally, the company has been profitable over the last twelve months, with analysts predicting profitability to continue this year. The InvestingPro Tips suggest that while ALEX's short-term obligations exceed its liquid assets, its ability to maintain profitability and dividend growth could be a positive sign for investors.
For those considering a deeper dive into Alexander & Baldwin's financials and future prospects, InvestingPro offers further insights, with additional tips available to guide investment decisions. By using the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to an extensive array of analytics and expert opinions.
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