Baird has reduced its 12-month price target for Highwoods Properties Inc. (NYSE: HIW) to $29 from $30, while keeping a Neutral rating on the office real estate investment trust. The stock was last trading at $23.02 and has fallen roughly 15% over the past year and about 20% in the past six months.
The analyst firm cited growing investor fatigue with Highwoods' out-year earnings growth story. In particular, Baird said that recent transaction activity at the company has delayed the timetable for the return to meaningful earnings growth, moving expectations into 2027.
Those company-specific timing issues come against a backdrop of weakening performance across office-sector equities. Investor concerns tied to artificial intelligence and the potential for office job losses have put additional pressure on shares in the space and raised questions about longer-term demand for office real estate.
Despite these sector headwinds and the downward revision from Baird, the company continues to pay a substantial dividend. Highwoods currently yields 8.73% and has an uninterrupted dividend record spanning 33 years. Valuation metrics cited for the stock include a price-to-earnings ratio of 15.83 and a price/earnings-to-growth (PEG) ratio of 0.3. At the same time, analysis suggests the shares are trading above a Fair Value estimate.
Baird also noted that the stock has suffered additional weakness beyond what the broader sector has experienced. The firm said management is taking steps intended to strengthen the company's longer-term growth profile, but that the extended timeline for when those improvements will materialize constitutes another challenge for a sector contending with a strong negative narrative.
Recent quarterly results offered a mixed picture. Highwoods reported Q4 2025 earnings per share of $0.26, beating the consensus forecast of $0.17 - a 52.94% upside surprise on EPS. Revenue, however, came in at $203.36 million versus expectations of $207.33 million, a shortfall of 1.91%.
The earnings beat was highlighted as a positive development for the company, even as the modest revenue miss tempered the overall reaction. Market response to the quarterly disclosures was described as modest.
Investors and analysts are continuing to monitor Highwoods' financial performance and the company's ability to execute on initiatives intended to re-accelerate growth. For now, the combination of a delayed growth timeline and ongoing sector skepticism appears to be keeping sentiment constrained.