BXP to Post Q3 Earnings: What to Expect From the Stock?

BXP, Inc. BXP is slated to report third-quarter 2025 results on Oct. 28, after market close. While the company’s quarterly results are likely to display a year-over-year rise in revenues, funds from operations (FFO) per share are expected to decline.

In the last reported quarter, this office real-estate investment trust (REIT) reported FFO per share of $1.71, which surpassed the Zacks Consensus Estimate of $1.67. The quarterly results reflected better-than-anticipated revenues on healthy leasing activity. However, higher interest expenses during the quarter marred its year-over-year FFO per share growth.

Over the preceding four quarters, BXP’s FFO per share surpassed the Zacks Consensus Estimate once, missed in the other and met in the remaining periods, the average beat being 0.45%. This is depicted in the graph below:

BXP, Inc. Price and EPS Surprise

BXP, Inc. price-eps-surprise | BXP, Inc. Quote

US Office Market in Q3

Per a Cushman & Wakefield report, the U.S. office demand is witnessing solid momentum for high-quality spaces as more companies are now expanding their footprint after years of curtailment. The supply pressure is also continuing to recede.

During the third quarter, though net absorption for the broader office market turned out to be negative, the gross leasing activity trended upward. Out of the 92 U.S. markets tracked by Cushman & Wakefield Research, 46 experienced positive absorption.

The demand for Class A assets is high due to companies' preference, driven by a focus on employee retention through enhanced experience. Fourteen markets experienced positive Class A absorption despite overall negative absorption.

The accelerating demand resulted in a contraction of vacant sublease availabilities by 14.5% from its first-quarter 2024 peak, with 55 U.S. markets witnessing year-over-year declines. Vacancy in obsolete assets is becoming increasingly prevalent.

Supply pressures are decelerating due to dwindling new construction activity and lower deliveries. The under-construction pipeline for the third quarter of 2025 stood at 22.5 million square feet (MSF), the lowest total in the 21^st century, representing a tad 0.4% of the total office inventory. At the same time, new deliveries in the third quarter at just 7.1 MSF were 30% lower than the quarterly average since 2020.

BXP: Factors at Play

In the context of the above U.S. office industry background, BXP is poised to gain from the growing preference for quality office spaces among tenants and the company's ability to offer such spaces. BXP’s properties are likely to have witnessed healthy leasing activity in the third quarter.

Moreover, the rise in demand for top-quality office spaces continues to be driven by technology and life science businesses. Amid strong demand from life-science tenants, the company is converting numerous straight office buildings to laboratory/life science spaces in its suburban portfolio. This is likely to have aided its leasing activity, boosting its top line in the reported quarter.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $806.6 million, suggesting a marginal increase from the prior-year quarter’s reported number.

However, substantial debt and high interest expenses are expected to have been a spoilsport for BXP during the to-be-reported quarter. We estimate a 1.3% year-over-year increase in interest expenses for the third quarter.

BXP’s activities in the to-be-reported quarter were inadequate in garnering analysts’ confidence. The Zacks Consensus Estimate for third-quarter FFO per share has remained unchanged at $1.72 over the past two months. Also, it suggests a 5% decrease from the year-ago quarter’s tally.

What Our Quantitative Model Predicts for BXP

Our proven model doesn’t conclusively predict a surprise in terms of FFO per share for BXP this quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

BXP has an Earnings ESP of -1.16% and currently carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the broader REIT sector — Ventas VTR and Extra Space Storage EXR — you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

Ventas, scheduled to report quarterly numbers on Oct. 29, has an Earnings ESP of +0.84% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Extra Space Storage, slated to release quarterly numbers on Oct. 29, has an Earnings ESP of +0.23% and carries a Zacks Rank of 3 at present.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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