• COPT Defense Properties recently reported its 2025 results, with revenue rising to US$763.92 million and net income to US$152.32 million, while also issuing 2026 earnings guidance and highlighting funds from operations of US$57.2 million in the fourth quarter.
• On the same day, the company announced an almost 11-year, 148,000-square-foot lease with a top 10 U.S. defense contractor, taking its US$450 million development pipeline to 86% pre-leased and reinforcing demand for its mission-critical defense properties.
• We’ll now examine how this combination of higher earnings, 2026 guidance, and a major long-term defense lease shapes COPT Defense’s investment narrative.

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What Is COPT Defense Properties' Investment Narrative?

To own COPT Defense Properties, you really have to believe in the resilience of its defense-focused tenant base and its ability to keep turning a specialized portfolio into steady cash flows. The 2025 results, with higher revenue and net income, back up that earnings story, while the US$57.2 million of fourth quarter FFO underlines why many investors focus on this metric for REITs. The new 11-year, 148,000-square-foot lease with a top defense contractor, which lifts the roughly US$450 million development pipeline to 86% pre-leased, directly supports one of the key short term catalysts: successful lease-up of ongoing projects. At the same time, 2026 EPS guidance and recent price gains suggest that some of this progress may already be reflected in expectations, leaving balance sheet pressure and relatively low forecast growth as important risks to watch.

However, the funding needs behind that development pipeline are something investors should be aware of. COPT Defense Properties' shares have been on the rise but are still potentially undervalued by 49%. Find out what it's worth.

Exploring Other Perspectives

Simply Wall St Community members currently offer 1 fair value estimate, clustering around about US$63.81 per share, implying very large potential upside from recent prices. Set against that is the reality of slower forecast earnings growth and debt that is not well covered by operating cash flow, which could influence how quickly any perceived mispricing closes.

Explore another fair value estimate on COPT Defense Properties - why the stock might be worth as much as 97% more than the current price!

Build Your Own COPT Defense Properties Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your COPT Defense Properties research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free COPT Defense Properties research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate COPT Defense Properties' overall financial health at a glance.

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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.