The price target for Boardwalk REIT (BOWFF, Financial) has been raised by BMO Capital analyst Michael Markidis. The new target is now set at C$75, up from the previous C$73. Despite this increase, the analyst maintains a Market Perform rating on the stock.
BOWFF Key Business Developments
Release Date: May 07, 2025
- Same-Property Rental Revenue Growth: Increased by 7.5% year-over-year.
- Same-Property Net Operating Income (NOI): Increased by 10.3% year-over-year.
- Operating Margin: Increased by 160 basis points.
- Same-Property Funds From Operations (FFO) Per Unit: Increased by 11.1%.
- Occupancy Rate: Maintained at 98%.
- Average Occupied Rent: $1,538 for two-bedroom apartments.
- Rental Revenue Growth (Sequential): 1.1% growth in Q1 2025 compared to Q4 2024.
- Total Rental Expenses Increase: Increased by 3% year-over-year.
- Interest Coverage Ratio: 3.0 for the current quarter.
- Liquidity: Approximately $273 million, including $27 million in cash and an undrawn $246 million operating line.
- Estimated Fair Value of Investment Properties: $8.4 billion as of March 31, 2025.
- FFO Per Unit Guidance for 2025: Forecasted between $4.35 and $4.60.
- Distribution Increase: 12.5% increase from the previous year, equating to $1.62 per trust unit on an annualized basis.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Boardwalk Real Estate Investment Trust (BOWFF, Financial) reported a 7.5% increase in same-property rental revenue and a 10.3% increase in same-property net operating income compared to the same quarter last year.
- The Trust achieved a high occupancy rate of 98%, reflecting strong demand for affordable housing.
- Boardwalk's strategic self-regulation of rental rates has resulted in high retention and occupancy, providing stability in a competitive market.
- The company has a strong financial position with approximately $273 million in liquidity, including cash and an undrawn operating line.
- Boardwalk's investments in community upgrades and amenities have enhanced its value proposition, contributing to high occupancy and resident satisfaction.
Negative Points
- Vacancy loss increased due to new supply entering select markets, leading to increased competition and vacancy, particularly for higher-priced products.
- Leasing spreads on new and renewed leases have decreased, reflecting a more balanced supply and demand picture.
- Total rental expenses increased by 3% for Q1 2025 compared to the same period in the prior year, primarily due to higher utilities consumption.
- The Trust faces challenges with cost uncertainties and timelines in its development pipeline, leading to a pause in some projects.
- Current interest rates are above the Trust's maturing rates, which could impact future refinancing costs.
