The brokerage's comments come on the heels of the review of its 10-Q. JMP sees slight upside potential for Alexander & Baldwin compared to the midpoint of its NAV, which remains at over $44 a share. The lead analysts pointed out that Alexander & Baldwin's adjusted EPS exceeded its estimate of $0.15 and consensus of $0.18 for 2016.
JMP said the results benefited from increased leasing NOI, a big tax gain and a narrower-than-predicted loss in its agribusiness. These positives were compensated by a Grace Pacific miss.
In the research note to clients, the brokerage said, "Following our 10-Q review, we update our estimates for slower absorptions at Maui Business Park, Ka Milo and Kahala Avenue, somewhat offset by slightly higher NOI. Hence, we decrease our 2016 and 2017 adjusted EPS estimates to $0.89 and $1.36 from $0.96 and $1.77, respectively."
The brokerage cited lack of catalysts like fresh developments in real estate or the acceleration in absorptions. The lead analyst believes the risk/reward is balanced to support its revised rating.
At time of writing, Alexander & Baldwin was down 3.13 percent, trading at $40.57.
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