COPT Defense Properties (CDP) AI Stock Analysis

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COPT Defense Properties

(NYSE:CDP)

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Rating:67Neutral

Price Target:$36.00▲(9.72% Upside)

Action:downgraded

Date:11/05/26

CDP’s score is driven primarily by solid underlying financial performance (strong margins and cash generation) and a very constructive earnings outlook with raised 2026 guidance and strong leasing/occupancy. These positives are tempered by a leveraged balance sheet and weak-to-neutral technicals (below key moving averages with negative MACD). Valuation is supportive via a ~3.82% dividend yield, but the ~22x P/E keeps the valuation component from scoring higher.

Positive Factors

Defense IT OccupancyThe concentration in defense IT properties and their high leasing levels support recurring rent durability. Strong occupancy in the company’s core portfolio indicates sustained demand for secure, mission-critical space and provides a solid base for continuing cash-flow generation.

Negative Factors

Leveraged Balance SheetDebt materially exceeds equity, leaving CDP more exposed to refinancing costs and operating weakness than a less leveraged owner. Although leverage improved from 2025, the balance-sheet structure can restrict financial flexibility and compete with development or acquisition funding.

COPT Defense Properties Key Performance Indicators (KPIs)

Real Estate Operations Revenue by SegmentShows rental and other operating revenue across business segments, highlighting the company’s main sources of growth, tenant demand, and exposure to changes in defense and government-related real estate activity.

Chart Insights

Growth is increasingly concentrated in Fort Meade/BW Corridor, NoVA Defense/IT, Redstone Arsenal, and a rapidly accelerating data-center-shell business, while Regional Office and wholesale data-center revenue effectively disappear—likely reflecting portfolio repositioning rather than broad-based expansion. Redstone’s resurgence is especially significant given management’s decision to accelerate development there amid near-full leasing and stronger defense-budget demand. The raised investment and leasing targets support continued momentum, though known move-outs, speculative Redstone inventory, and data-center power constraints could make second-half growth less linear.

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The Fly

COPT Defense Properties (CDP) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $3.72B
Dividend Yield: 3.86%
Average Volume (3M): 896.20K
Price to Earnings (P/E): 21.9
Beta (1Y): 0.27
Revenue Growth: 7.22%
EPS Growth: 13.17%
Country: US
Employees: 430
Sector: Real Estate
Sector Strength: 65
Industry: REIT - Office

COPT Defense Properties Business Overview & Revenue Model

Company Description

COPT is a Real Estate Investment Trust (REIT) that focuses on the ownership, management, leasing, development, and strategic acquisition of office and data center assets. The majority of its portfolio is dedicated to serving the United States Governm...

How the Company Makes Money

CDP primarily makes money by leasing space in its portfolio of office properties (and any related supporting facilities) to tenants tied to U.S. defense and government technology missions, including U.S. government agencies and defense contractors. T...

COPT Defense Properties Earnings Call Summary

Earnings Call Date:Oct 29, 2026(Q3-2026)|% Change Since:-4.20%|Next Earnings Date:Feb 11, 2027

Earnings Call SentimentPositive

The call was strongly positive, with management reporting FFO and same-property NOI outperformance, robust vacancy leasing, raised 2026 guidance, high occupancy, significant development demand, expanded Redstone Gateway capacity, and a supportive defense-spending backdrop. The principal challenges were higher interest expense and financing rates, exchangeable-note dilution, lower retention guidance resulting from strategic space recaptures, modest lease-rate and occupancy declines, and delayed noncore asset dispositions. Management characterized the underlying business strategy, tenant demand, balance sheet, and execution outlook as strong.

Positive Updates

FFO and Same-Property NOI Outperformance

Third-quarter FFO per share was $0.71, $0.02 above the midpoint of guidance and up 2.9% year over year. Same-property cash NOI increased 3.2% year over year and 5.3% during the first 9 months.

Negative Updates

Lower Tenant Retention Guidance from Strategic Recaptures

Although tenant retention was tracking to 84%, the company reduced the midpoint of its guidance by 250 basis points to 80% after creating an opportunity to recapture space from three suboptimal tenants and release it to higher-value tenants. Quarterly tenant retention was 70%, with the three recapture activities reducing the quarter's retention result by 11 percentage points.

Company Guidance

For 2026, COPT Defense increased the midpoint of FFO per share as adjusted for comparability to $2.80 per share, same property cash NOI growth to 4.25%, capital committed to new investments to $375 million, and capital invested in development and acquisitions to $240 million; it reduced the midpoint of tenant retention guidance by 250 basis points to a still very strong 80% and increased the vacancy leasing target to 625 thousand square feet. Management expects FFO per share growth of nearly 3% in 2026, or roughly 4% this year excluding the increased dilution from exchangeable notes, and expects same property occupancy to end the year at roughly 94%; it also expects lease activity at 410 Goss Road sometime in 2027.

COPT Defense Properties Financial Statement Overview

Summary

Fundamentals are generally solid, led by strong profitability (TTM net margin ~21.2%, EBIT margin ~33.2%) and healthy cash generation (TTM operating cash flow $454.7M; free cash flow $224.7M with ~93% conversion vs. net income). Offsetting this, leverage remains a key risk (TTM debt $2.62B vs. equity $1.54B) and results have shown volatility (including a 2023 loss) alongside softer recent free-cash-flow momentum.

Income Statement

74Positive

Balance Sheet

56Neutral

Cash Flow

71Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	804.14M	763.92M	753.27M	684.98M	739.03M	664.45M
Gross Profit	384.62M	117.85M	260.36M	231.23M	220.41M	209.47M
EBITDA	438.00M	410.84M	384.02M	152.68M	354.46M	294.41M
Net Income	170.10M	152.31M	138.93M	-73.47M	173.03M	76.54M
Balance Sheet
Total Assets	4.57B	4.70B	4.25B	4.25B	4.26B	4.26B
Cash, Cash Equivalents and Short-Term Investments	24.26M	274.99M	38.28M	167.82M	12.34M	13.26M
Total Debt	2.62B	2.81B	2.44B	2.45B	2.26B	2.30B
Total Liabilities	2.95B	3.11B	2.69B	2.70B	2.51B	2.58B
Stockholders Equity	1.54B	1.51B	1.49B	1.48B	1.68B	1.62B
Cash Flow
Free Cash Flow	221.53M	228.68M	299.61M	255.77M	229.45M	219.12M
Operating Cash Flow	451.58M	309.93M	330.95M	276.27M	265.82M	249.15M
Investing Cash Flow	-408.00M	-289.74M	-291.01M	-169.62M	-83.46M	-202.97M
Financing Cash Flow	-290.16M	216.54M	-169.67M	46.26M	-183.18M	-50.90M

COPT Defense Properties Technical Analysis

Technical Analysis SentimentNegative

Last Price32.81

Price Trends

50DMA33.78Negative

100DMA35.17Negative

200DMA33.19Negative

Market Momentum

MACD-0.25Positive

RSI43.71Neutral

STOCH33.95Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CDP, the sentiment is Negative. The current price of 32.81 is below the 20-day moving average (MA) of 33.33, below the 50-day MA of 33.78, and below the 200-day MA of 33.19, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 43.71 is Neutral, neither overbought nor oversold. The STOCH value of 33.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CDP.

COPT Defense Properties Risk Analysis

COPT Defense Properties disclosed 39 risk factors in its most recent earnings report. COPT Defense Properties reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

0 New Risks

COPT Defense Properties Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

CDP against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PDM	69Neutral	$1.23B	-14.03	-5.98%	―	2.85%	-25.01%
CDP	67Neutral	$7.42B	21.87	11.15%	3.86%	7.22%	13.17%
Sector *	65Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
BXP	64Neutral	$11.28B	18.97	10.32%	4.41%	2.67%	―
HIW	64Neutral	$3.43B	18.39	7.89%	6.44%	5.59%	45.12%
DEA	61Neutral	$1.07B	74.01	1.10%	7.99%	11.40%	-2.83%
VNO	58Neutral	$7.24B	-127.41	0.15%	2.08%	1.55%	-106.41%

* Real Estate Sector Average

Performance Comparison

CDP and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
CDP	Copt Defense Properties	32.81	5.09	18.38%
BXP	BXP	63.54	-4.10	-6.06%
HIW	Highwoods Properties	31.08	4.18	15.52%
VNO	Vornado Realty Trust	35.56	1.59	4.69%
PDM	Piedmont Office Realty Trust	9.96	1.74	21.17%
DEA	Easterly Government Properties Inc.	22.53	2.75	13.90%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Nov 05, 2026

COPT Defense Properties AI Stock Analysis