Boston Properties (BXP:NYS) Fundamental Valuation Report


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Boston Properties $118.93 (USD) Close Price as of 02/03/2018

Based on the analysis conducted in this report, Boston Properties, (BXP:NYS) is found to be  Undervalued.

Company Boston Properties
Symbol:Exchange BXP:NYS
Industry Real Estate:REIT-Office
Close Price/Date $118.93 (USD) 02/03/2018
Weighted Average Valuation $131.94 (USD)
Summary BXP:NYS is found to be  Undervalued by 10.9% using the 3 valuation models shown below.
Valuation Models Used Analyst Consensus: $135.50 (USD)
(in order of importance) Adjusted Book Value: $129.93 (USD)
Comparables: $125.29 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Overvalued on a Cash Flow Valuation basis
Comparable Company Basis: Undervalued on a Comparable Valuation basis
Asset Basis: Undervalued on an Asset Valuation basis

Valuation Details

Boston Properties Valuations

Summary chart

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for BXP:NYS

Using a discounted cash flow model we generated an intrinsic value of $18.18 (USD) for BXP:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

BXP:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $18.18 1% 5% 1% 5%
WACC (or Ke) 6.10 $40.13 $3.59
Terminal Growth Rate 1.10 $4.82 $38.21
Tax Rate 0.30 $26.93 $9.42
Cash Flow 1,845,277,200 $10.17 $26.18
Capital Expenditures -562,199,400 $15.83 $20.52
Long Term Debt 9,808,922,000 $21.36 $15.00

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $125.29 (USD) for BXP:NYS. We also generated a valuation of $111.02 (USD) using other metrics and comparables.
The comparable companies were Alexandria Real Estate (ARE:NYS), Douglas Emmett (DEI:NYS), Hudson Pacific Properties (HPP:NYS), Liberty Prop Trust (LPT:NYS) and SL Green Realty (SLG:NYS)

Company BXP:NYS End Date Value
Earnings/Share $2.93 (USD)
Book Value/Share $37.67 (USD)
Sales/Share $16.85 (USD)
Cash Flow/Share $5.88 (USD)
EBITDA/Share $10.02 (USD)
Price Based on Comps Adjustment Factor (%)
$167.28 (USD) -26.1
$70.34 (USD) 74.4
$133.93 (USD) 37.1
$107.95 (USD) -37.1
$108.90 (USD) 18.1
BXP:NYS Ratios Used Average Values ARE:NYS DEI:NYS HPP:NYS LPT:NYS SLG:NYS
41.33 PE Ratio 57.09 78.16 62.26 71.59 21.96 51.50
3.16 PB Ratio 1.87 2.13 2.51 1.36 1.87 1.47
7.06 PS Ratio 7.95 11.20 7.17 6.66 8.01 6.69
20.23 PCF Ratio 18.37 25.25 14.46 16.55 17.13 18.45
18.21 EV to EBITDA 17.51 0.00 19.12 15.55 16.39 18.99

Multiples

Using a multiples approach we generated a valuation of  $145.44 (USD) for BXP:NYS

Company BXP:NYS End Date Value
Earnings/Share $2.93 (USD)
Book Value/Share $37.67 (USD)
Sales/Share $16.85 (USD)
Cash Flow/Share $5.88 (USD)
EBITDA/Share $10.02 (USD)
Price Based on Comps Adjustment Factor
$144.79 (USD) 0
$130.72 (USD) 0
$130.98 (USD) 0
$131.62 (USD) 0
$189.11 (USD) 0
Ratios Ratio Average
PE Ratio 49.41
PB Ratio 3.47
PS Ratio 7.77
PCF Ratio 22.39
EV to EBITDA 18.88

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  BXP:NYS for the last 10 years was  3.45

We ran the Adjusted Book Value for  BXP:NYS and generated a book value of  $37.67 (USD)
By multiplying these we get an adjusted valuation of  $129.93 (USD)

Analyst Data

In the Stockcalc database there are 4 analysts that provide a valuation for BXP:NYS. The 4 analysts have a concensus valuation for BXP:NYS for 2018 of $135.50 (USD).

BXP:NYS Boston Properties

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
3 3 0 4.0000 Outperform 2018-3-1

Current Price: not available

Analyst Consensus
USD Millions 2018 2019 2020
Mean EPS 3.00 3.74 3.99
# EPS Analysts 2 1 1
Mean Revenue 2,659.20 2,636.50 2,705.10
# Revenue Analysts 2 1 1
Mean Target Price 135.50
Mean Cash Flow 6.91 7.15 8.37
Mean EBITDA 1,576.00 1,670.70 1,825.20
Mean Net Income 462.50 577.50 616.80
Mean Debt Outstanding -10,133.60 -10,175.80 -10,136.90
Mean Tax Rate
Mean Growth Rate 4.45
Mean Capital Expenditure 422.00 333.90

Company Overview (BXP:NYS USD)

Price 118.93
Range 117.16 – 119.15
52 week 112.09 – 136.87
Open 118.00
Vol / Avg. 633797/829433
Mkt cap 18.35B
P/E 41.33
Div/yield 3.20/0.03
EPS 2.93
Shares 154.32M
Beta 1.18
Summary chart

Detailed Company Description

Boston Properties Inc is a fully integrated, self-administered and self-managed real estate investment trust. The company owns, develops and manages office properties in the United States.

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

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