Goldman Sachs has initiated analyst coverage of Alexandria Real Estate Equities (NYSE: ARE) with a Neutral recommendation and a $60.00 price target, a benchmark the bank says equates to roughly a 15% total return including a 5% dividend yield. According to InvestingPro figures cited in the coverage note, ARE is trading at $54.15, well below its 52-week peak of $105.14, and is judged undervalued under InvestingPro’s Fair Value framework.
The firm framed its view around what it described as a "complex interplay" - Alexandria’s high-quality, life-science-focused real estate assets on one hand and substantial structural pressures within the U.S. life science industry on the other. Those pressures are central because the life science sector forms the core of Alexandria’s tenant base and asset strategy.
Goldman Sachs acknowledged a number of points on both sides of the ledger. On the positive side, the bank noted industry developments such as an injunction affecting NIH funding caps and growth in venture capital funding for biotech, which it said point to signs that market conditions may be approaching a trough. The report also recognized Alexandria’s track record and positioning, using phrases that the company retains a "dominant position in premier clusters" and pursues a "strong megacampus strategy."
Still, Goldman’s internal lab-space demand model forecasts that net absorption of lab space will not turn "sustainably positive" until 2027, implying an extended period of excess supply relative to demand across the life-science real estate market. That extended recovery timeline, combined with continuing uncertainty in the life science ecosystem, underpins the bank’s Neutral stance despite Alexandria’s market strengths.
On balance-sheet and earnings metrics, the bank pointed to some liquidity strengths: liquid assets exceed short-term obligations. However, InvestingPro data referenced in the note shows Alexandria was not profitable over the past twelve months, recording a diluted EPS of -$8.44.
Separately, Alexandria reported fourth-quarter 2025 results that delivered mixed signals to the market. The REIT reported revenue of $754.41 million, topping the consensus expectation of $623.36 million. At the same time, the company posted an EPS of -6.35, missing the forecast of $0.28 by a substantial margin - a negative surprise the coverage describes as greater than 2,300%. The market’s reaction to that combination of revenue beat and large EPS shortfall was described as less than favorable.
Additional company-level metrics cited in the note include Alexandria’s long record of dividend distribution, with the REIT having paid dividends for 29 consecutive years and currently yielding 5.32%. Over the past six months, the stock has declined by approximately 26.56%.
Goldman Sachs therefore balances the firm’s asset quality and strategic footprint in leading life-science clusters against an outlook for a drawn-out recovery in lab-space fundamentals and lingering sector uncertainty, concluding that a Neutral rating appropriately reflects that mix of strengths and risks.
Sector impact - The assessment and results have implications for life-science real estate, biotech tenants, and the REIT sector more broadly, as prolonged weak demand for specialized lab space could pressure valuations and leasing fundamentals across the market.