ARE Should I Buy
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Alexandria Real Estate Equities Inc (ARE) is not a good buy at the moment for a beginner investor with a long-term strategy. The stock is currently in a bearish trend with weak technical indicators, declining financial performance, and neutral sentiment from hedge funds and insiders. Additionally, analyst ratings and price targets reflect limited upside potential in the near term. While the company's recent debt offering indicates strong market demand for its instruments, the overall outlook for the life science real estate sector remains challenging, with a prolonged recovery timeline.
The stock is in a bearish trend with the MACD histogram at -0.587 (negatively expanding), RSI_6 at 22.66 (neutral zone), and moving averages indicating a downtrend (SMA_200 > SMA_20 > SMA_5). Key support and resistance levels are S1: 51.255, S2: 49.552, R1: 56.767, and R2: 58.47. The stock closed at $50.62, below the pivot of $54.011, signaling further downside risk.
The company successfully priced a $750 million senior notes offering at 5.25%, with strong market demand for its debt instruments. Proceeds will be used to repay borrowings, which may improve financial stability.
Declining revenue (-21.15% YoY in Q4 2025), weak gross margin (-53.03% YoY), and ongoing challenges in the life science real estate sector with oversupply and tepid demand. Analysts project a prolonged recovery timeline for tenant demand, with equilibrium not expected until 2027.
In Q4 2025, revenue dropped by -21.15% YoY to $647.37 million. Net income improved significantly to -$1.08 billion (+1566.37% YoY), but EPS remained negative at -6.35 (+1571.05% YoY). Gross margin declined sharply to 14.33 (-53.03% YoY), reflecting operational inefficiencies.
Analyst sentiment is neutral to slightly bearish. Recent price target changes include Morgan Stanley lowering the target to $54, Goldman Sachs initiating coverage with a Neutral rating and $60 target, and Cantor Fitzgerald lowering the target to $46. Analysts cite systemic pressures in the life science industry, weak tenant demand, and oversupply as key challenges.
