Highwoods Properties (HIW) AI Stock Analysis

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Highwoods Properties

(NYSE:HIW)

Rating:66Neutral

Price Target:

$34.00

▲(7.97%Upside)

Highwoods Properties' overall stock score is supported by strong cash flow and a solid dividend yield, which provide a cushion against revenue challenges and macroeconomic uncertainties. The bullish technical indicators and positive earnings call sentiment further enhance the outlook, although caution is advised due to potential overbought conditions in the stock's technicals and the risks highlighted in the earnings call.

Positive Factors

Asset Sales

Highwoods Properties has successfully completed the sale of non-core buildings in Raleigh and Tampa, generating $166.4 million in gross proceeds.

Financial Flexibility

The company raised $51.3 million through the sale of its shares, enhancing its financial flexibility for future investments.

Leasing Activity

Leasing activity increased to 1.3mn SF from 0.9mn SF in the previous quarter.

Negative Factors

Earnings Expectations

There is an expectation for Highwoods Properties' earnings guidance to potentially be lower than consensus estimates.

Financial Guidance

The 25e guidance is below expectations driven by lower same-store NOI and would expect shares to be under pressure.

Occupancy Rates

Occupancy is at 87.1%, showing a decline both quarter-over-quarter and year-over-year.

Highwoods Properties (HIW) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.39B

Dividend Yield6.35%

Average Volume (3M)851.50K

Price to Earnings (P/E)19.7

Beta (1Y)1.02

Revenue Growth-2.01%

EPS Growth31.64%

CountryUS

Employees350

SectorReal Estate

Sector Strength69

IndustryREIT - Office

Share Statistics

EPS (TTM)0.91

Shares Outstanding107,810,610

10 Day Avg. Volume822,051

30 Day Avg. Volume851,504

Financial Highlights & Ratios

PEG Ratio-0.68

Price to Book (P/B)1.19

Price to Sales (P/S)0.00

P/FCF Ratio6.98

Enterprise Value/Market Cap2.24

Enterprise Value/Revenue2.30

Enterprise Value/Gross Profit16.02

Enterprise Value/Ebitda4.20

Forecast

1Y Price Target

$29.40

Price Target Upside-6.64% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering6

Highwoods Properties Business Overview & Revenue Model

Company DescriptionHighwoods Properties, Inc. (HIW) is a publicly traded real estate investment trust (REIT) that specializes in owning, managing, and developing office properties. Headquartered in Raleigh, North Carolina, the company primarily operates in the Southeastern and Midwestern United States. Highwoods' portfolio includes a mix of Class A office spaces, which are typically considered high-quality properties with excellent locations and amenities, catering to a diverse range of tenants across various industries.

How the Company Makes MoneyHighwoods Properties generates revenue primarily through leasing office space to tenants. The company's key revenue streams include rental income from its office properties, which accounts for the majority of its earnings. Highwoods employs a proactive property management and leasing strategy to maximize occupancy rates and rental income. Additionally, the company may also generate revenue from property development and redevelopment projects, which involves constructing new buildings or upgrading existing ones to enhance their value and attract potential tenants. Strategic partnerships with local businesses and municipalities can also play a role in supporting development projects and enhancing market presence. Furthermore, Highwoods may engage in property acquisitions and dispositions as part of its capital recycling strategy, which helps optimize its portfolio and financial performance.

Highwoods Properties Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q1-2025)

% Change Since: 15.43%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong financial performance, robust investment activity, and successful leasing efforts, contributing to a positive outlook despite macroeconomic uncertainties and challenges in leasing capital expenditure. The company's strategic focus on high-quality assets in Sunbelt markets positions it well for future growth.

Q1-2025 Updates

Positive Updates

Strong Financial Performance and Growth

Highwoods Properties delivered FFO of $0.83 per share, exceeding expectations, and generated healthy cash flow with a raised 2025 FFO outlook. The company executed substantial leasing activity and investment transactions, setting up for future growth.

Robust Investment Activity

The company recycled $145 million of non-core disposition proceeds into the acquisition of a $138 million Class AA building in North Hills, Raleigh, which is accretive to cash flow and expected to contribute significantly to long-term growth.

Leasing Success Across Portfolio

Highwoods signed 97,000 square feet of first-gen leases and 700,000 square feet of second-gen office space, with net effective rents more than 20% higher than the prior five-quarter average. The leasing pipeline remains strong.

Positive Outlook for Office Market

Despite macroeconomic uncertainties, the company remains optimistic due to strong leasing activity, robust demand in Sunbelt markets, and lack of new office supply, which is expected to drive rent growth.

Negative Updates

Macroeconomic Uncertainties

Concerns over the macroeconomic outlook, including potential government cutbacks and global tariffs, pose risks that could impact future leasing and investment activity.

Elevated Vacancy and Lease-Up Challenges

While the company executed significant leasing, there were known customer move-outs, leading to a dip in occupancy. The lease-up of certain core properties remains a focus to drive future NOI growth.

Increased Leasing Capital Expenditure

Higher leasing capital is expected over the next few quarters as the company works to drive occupancy higher, which will impact cash flow in the short term.

Company Guidance

During the Highwoods Properties Q1 2025 earnings call, the company provided several key metrics and guidance updates. They reported a robust investment activity with $145 million in non-core dispositions recycled into the $138 million acquisition of Advance Auto Parts Tower, enhancing their portfolio quality and projected long-term growth. The company placed in service 2827 Peachtree, a 79,135 square foot development, which is 94% leased. They signed 97,000 square feet of first-gen leases in their development pipeline, now 63% leased, and 700,000 square feet of second-gen office space with net effective rents over 20% higher than the prior five-quarter average. They raised the midpoint of their 2025 FFO outlook by $0.04, to a range of $3.31 to $3.47 per share, following strong financial performance and the acquisition of Advance Auto Parts Tower. Additionally, Highwoods' occupancy dipped due to known move-outs but is expected to grow in the coming years with a healthy backlog of signed leases. The company has also secured over 40% of the $25 million NOI growth from four core buildings and anticipates further growth from developments in Raleigh and Dallas.

Highwoods Properties Financial Statement Overview

Summary

Highwoods Properties exhibits mixed financial results. The income statement shows declining revenue and profitability, but the balance sheet indicates good leverage with no reported debt. Cash flow performance is strong, supporting liquidity and operational resilience. Overall, the company has a stable financial base despite revenue challenges.

Income Statement

Negative

Highwoods Properties' income statement shows mixed results. The company has experienced a significant decline in total revenue for the latest annual report, leading to negative EBIT and a drastic reduction in net income. Despite these challenges, the company has maintained a positive EBITDA margin, indicating operational efficiency. However, the overall revenue growth rate appears stagnant over the years.

Balance Sheet

Neutral

The balance sheet of Highwoods Properties reveals moderate financial stability. The company has a solid equity ratio and no total debt reported in the most recent period, suggesting improved leverage. However, the return on equity has decreased due to the reduction in net income, potentially impacting future financial flexibility.

Cash Flow

Positive

Highwoods Properties shows strong cash flow metrics. The company has consistently generated positive operating cash flow, and the free cash flow has shown growth. The operating cash flow to net income ratio is favorable, indicating efficient cash generation relative to profits. This strong cash position supports the company's liquidity and operational resilience.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
816.59M	830.02M	834.00M	828.93M	768.01M	736.90M
	Gross Profit
474.73M	557.85M	565.22M	569.12M	531.57M	505.07M
	EBIT
207.32M	515.94M	224.05M	242.35M	237.01M	227.29M
	EBITDA
516.12M	474.48M	528.51M	283.94M	250.93M	232.25M
	Net Income Common Stockholders
173.63M	102.25M	148.72M	58.57M	222.18M	261.61M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
20.11M	22.41M	25.12M	21.36M	23.15M	109.32M
	Total Assets
6.08B	6.03B	6.00B	6.06B	5.70B	5.21B
	Total Debt
0.00	3.29B	3.21B	3.20B	2.79B	2.47B
	Net Debt
3.32B	3.27B	3.19B	3.18B	2.77B	2.36B
	Total Liabilities
3.60B	3.60B	3.52B	3.50B	3.08B	2.74B
	Stockholders Equity
2.41B	2.36B	2.43B	2.48B	2.48B	2.34B
Cash Flow		Free Cash Flow
337.49M	403.58M	386.96M	421.51M	272.50M	355.80M
	Operating Cash Flow
381.87M	403.58M	386.96M	421.78M	414.56M	358.16M
	Investing Cash Flow
-272.33M	-302.44M	-169.69M	-614.80M	-287.68M	110.68M
	Financing Cash Flow
-97.31M	-99.04M	-205.43M	187.93M	-284.93M	-294.34M

Highwoods Properties Technical Analysis

Technical Analysis Sentiment

Positive

Last Price31.49

Price Trends

50DMA

28.75

Positive

100DMA

28.59

Positive

200DMA

29.72

Positive

Market Momentum

MACD

0.73

Negative

RSI

65.27

Neutral

STOCH

84.93

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HIW, the sentiment is Positive. The current price of 31.49 is above the 20-day moving average (MA) of 30.30, above the 50-day MA of 28.75, and above the 200-day MA of 29.72, indicating a bullish trend. The MACD of 0.73 indicates Negative momentum. The RSI at 65.27 is Neutral, neither overbought nor oversold. The STOCH value of 84.93 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HIW.

Highwoods Properties Risk Analysis

Highwoods Properties disclosed 36 risk factors in its most recent earnings report. Highwoods 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

Highwoods Properties Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KRC	72 Outperform	$8.33B	20.98	3.69%	6.13%	1.11%	-3.07%
PGRE	70 Outperform	$1.54B	―	-2.11%	2.17%	1.67%	73.75%
HIW	66 Neutral	$3.39B	19.70	7.21%	6.35%	-2.01%	31.64%
CUZ	66 Neutral	$5.05B	89.81	1.15%	4.26%	10.93%	-31.07%
Sector *	61 Neutral	$2.83B	10.72	0.40%	6.10%	5.80%	-21.26%
DEI	61 Neutral	$3.03B	47.20	2.49%	5.09%	-1.98%	―
SLG	58 Neutral	$4.96B	663.10	-0.13%	4.74%	13.36%	94.82%

* Real Estate Sector Average

Performance Comparison

HIW

Highwoods Properties

31.49

7.63

31.98%

CUZ

Cousins Properties

30.07

8.21

37.56%

DEI

Douglas Emmett

14.93

2.32

18.40%

KRC

Kilroy Realty

35.22

5.45

18.31%

SLG

SL Green Realty

65.20

10.90

20.07%

PGRE

Paramount Group

6.45

1.88

41.14%

Highwoods Properties Corporate Events

Shareholder MeetingsBusiness Operations and Strategy

Highwoods Properties Approves New Equity Incentive Plan

Neutral

May 13, 2025

On May 13, 2025, Highwoods Properties‘ stockholders approved a new long-term equity incentive plan, which aims to align the interests of directors, officers, and employees with those of the stockholders by granting them ownership stakes in the company. The plan allows for the issuance of up to 1,250,000 shares of common stock as restricted stock or restricted stock units, with specific limitations on the number of shares that can be granted annually to individuals. Key features include restrictions on share recycling, prohibitions on stock options, and specific vesting period requirements, ensuring that awards are aligned with long-term company success. Additionally, the company held its annual stockholders’ meeting on the same day, where various matters, including the election of directors and the ratification of Deloitte & Touche LLP as the independent auditor for 2025, were voted on.

The most recent analyst rating on (HIW) stock is a Hold with a $22.00 price target. To see the full list of analyst forecasts on Highwoods Properties stock, see the HIW Stock Forecast page.

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.