Highwoods Properties (HIW) has drawn investor attention after agreeing to sell Bridgestone Tower, a fully leased Nashville office property, for US$255 million, with the deal expected to generate a sizable non-FFO gain.

The sale news lands at a time when momentum in the stock has been rebuilding, with a 30 day share price return of 15.68% and a 90 day share price return of 18.20%, even as the 1 year total shareholder return declined 6.31% and the 5 year total shareholder return declined 16.19%.

If you are looking beyond office REITs and want to see what else is moving, this could be a good moment to check out 20 top founder-led companies

With HIW trading close to its analyst target and recent returns picking up after longer term declines, the key question is whether the intrinsic discount signals undervaluation or if the market is already pricing in future growth.

Most Popular Narrative: 1% Undervalued

Highwoods Properties' fair value narrative of $26.22 sits just above the last close at $26.04. The small gap puts the focus on the assumptions that support that estimate rather than a big pricing mismatch.

Analysts expect earnings to reach $91.9 million (and earnings per share of $0.45) by about April 2029, down from $157.3 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $79.6 million.

Want to see what keeps fair value close to the current price even with earnings projected lower and margins thinner, while the assumed future earnings multiple stretches higher than the sector?

Result: Fair Value of $26.22 (UNDERVALUED)

However, there are still clear risks, including structurally weaker office demand from remote work and the need for ongoing, heavy capital spending on aging properties.

Next Steps

Mixed signals on value and earnings can split opinion. If you care about timing your decisions, review the 2 key rewards and 3 important warning signs.

Looking for more investment ideas?

If you stop with just one stock, you risk missing other opportunities that might fit your goals even better, so put a few more options on your radar.

• Target stability by reviewing companies in the 68 resilient stocks with low risk scores that may better align with a cautious approach to market swings.
• Spot potential value by checking out the 47 high quality undervalued stocks that combine solid fundamentals with prices that might not fully reflect their underlying metrics.
• Get ahead of the crowd by scanning the screener containing 23 high quality undiscovered gems that the broader market may not be paying attention to yet.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.