BXP to Post Q2 Earnings: What to Expect From the Stock?

Core Insights - BXP, Inc. is expected to report second-quarter 2025 results on July 29, with anticipated year-over-year revenue growth but a decline in funds from operations (FFO) per share [1][10] Company Performance - In the last reported quarter, BXP met the Zacks Consensus Estimate for FFO per share, driven by strong leasing activity, although higher interest expenses negatively impacted year-over-year FFO growth [2] - Over the past four quarters, BXP's FFO per share has surpassed the Zacks Consensus Estimate once, missed once, and met in the remaining periods, with an average beat of 0.58% [3] Market Environment - The U.S. office market is showing signs of stabilization despite economic uncertainty, with net absorption being negative in the second quarter but improving on a four-quarter rolling basis [4] - Demand for high-quality office spaces is increasing, with Class A absorption positive in 48 out of 92 U.S. markets, while new construction activity is declining significantly [5] Vacancy and Leasing Trends - Overall U.S. office vacancy increased slightly to 20.8%, up 20 basis points quarterly and 90 basis points year-over-year, with sublease activities also rising slightly [6] BXP's Projections for Q2 - BXP is expected to benefit from the growing demand for quality office spaces, with rental revenues projected to increase by 4.3% year-over-year [7] - The Zacks Consensus Estimate for second-quarter revenues is $801 million, reflecting a 1.31% increase from the prior year [8] Challenges Faced - Occupancy rates are expected to decline by 40 basis points to 86.5% due to high competition and significant lease expirations [9] - High interest expenses are projected to increase by 9.4% year-over-year, which may negatively impact BXP's FFO per share [9][10] Analyst Sentiment - Analysts have slightly revised the Zacks Consensus Estimate for second-quarter FFO per share down to $1.67, indicating a 5.65% decrease from the previous year [11] - The current Earnings ESP for BXP is -0.50%, and it holds a Zacks Rank of 4 (Sell), suggesting limited potential for a positive surprise in FFO this quarter [12]