Goldman Sachs’ Stocks With Highest Consensus Returns: 42 Stocks With The Highest Consensus ROE

3. Alexandria Real Estate Equities, Inc. (NYSE:ARE)

Consensus ROE: 47%

Number of Hedge Fund Investors in Q2 2024: 36

Alexandria Real Estate Equities, Inc. (NYSE:ARE) is a specialty real estate investment trust that owns and operates office and laboratory properties primarily used by the life sciences industry. Consequently, the firm’s shares are down 9.5% year to date as the life sciences industry typically thrives when rates are low and plenty of funds are available for research and development activities. Since funding is constrained, fewer life sciences companies are renting out office and laboratory spaces which has led to an oversupply in the market and depressed the rates that Alexandria Real Estate Equities, Inc. (NYSE:ARE) can charge for its properties. However, even though these trends have affected its performance, the REIT enjoys several advantages within its sector. For instance, most of Alexandria Real Estate Equities, Inc. (NYSE:ARE)’s properties are in life sciences hubs and major cities such as Boston, Seattle, San Francisco, and San Diego. This means that the firm enjoys proximity to research clusters. Additionally, a large portion of its largest tenants are also large cap companies. Subsequently, once the life sciences sector improves, Alexandria Real Estate Equities, Inc. (NYSE:ARE) could see sizeable tailwinds.

ClearBridge Investments mentioned Alexandria Real Estate Equities, Inc. (NYSE:ARE) in its Q2 2024 investor letter. Here is what the fund said:

“We also added to existing holdings in sectors we feel are well-positioned to outperform as they rebound off current lows. This included Alexandria Real Estate Equities, Inc. (NYSE:ARE), which should benefit from a narrowing in the spread between capitalization rates and financing costs, and a potential relief in funding costs as interest rates move lower.”