LXP INDUSTRIAL TRUST (LXP): what the price assumes

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/LXP

Headline

Field	Value
Ticker	LXP
Company	LXP INDUSTRIAL TRUST
Current price	$60.83/sh

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	reit
Price-to-FFO	11.8x
FFO yield	8.5%

The price sits below what even a 5%/yr funds-from-operations decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 9.3% cost of equity with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range

Reference	Value
vs own history	-0.58σ
cohort percentile (of 105 peers)	21
implied end-window share	0%

Valuation X-Ray

The price is supported by earnings-power and relative-multiple and growth-DCF value, while asset-based lands below the price. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	4.33x	4	expensive
Earnings	1.08x	3	expensive
Relative	1.14x	6	expensive
Growth	1.08x	5	expensive

Families that justify the price: Earnings, Relative, Growth Families that call it expensive: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.9%); the inversion above states its own rate.

Per-Model Detail (n=18)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$30.03	2.03x	yes	FCF base $0.2B, growth -3% (input: historical growth), terminal g 0.5%, WACC 6.9%, 5yr projection
DCF Exit Multiple	Growth	$72.20	0.84x	yes	Exit EV/EBITDA: 22.2x / 24.2x / 26.2x (bear / base = today's held flat / bull), 5yr
Relative Valuation	Relative	$90.19	0.67x	yes	P/E 25.67x (blended: static sector reference 35x + trailing (TTM) 12x), scenarios: 21.7x / 25.7x / 29.6x (bear / base = reference held flat / bull), EV/EBITDA 20x
Simple DDM	Growth	$68.50	0.89x	yes	DPS $2.96, g=4.7% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3%
Two-Stage DDM	Growth	$56.42	1.08x	yes	Stage 1: 5% for 5yr, Stage 2: 3.5% perpetual
Simple Excess Return	Asset	$17.46	3.48x	yes	BV/sh $34.17, ROE (TTM) 4.7%, ke 9.3%
Two-Stage Excess Return	Asset	$11.73	5.19x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$35.11	1.73x	yes	Rev $0.3B, growth -3% (input: historical growth; tapered), Terminal P/S: 6.8x / 8.0x / 9.2x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair Value	Relative	$62.52	0.97x	yes	FFO/share $5.21, growth 5% (input: historical FFO/share growth, 10y median), PEG=7.79 (Overvalued)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	—	—	no	—
Residual Income	Asset	$10.74	5.66x	yes	BV $34.17 + 5yr PV of (ROE (TTM) 4.7% − Kₑ 9.3%) × BV; BV grows 3.1%/yr
Graham Number	Asset	$63.29	0.96x	yes	√(22.5 × FFO/share $5.21 × BVPS $34.17) — Graham's conservative floor
EV/EBITDA Relative	Relative	$46.63	1.30x	yes	EBITDA $0.20B × sector EV/EBITDA 20.0x
FCF Yield	Earnings	$13.84	4.40x	yes	FCF $187.2M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	—	—	no	—
Ben Graham Formula	Earnings	$79.32	0.77x	yes	FFO/share $5.21 × (8.5 + 2×4.8%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	—	—	no	—
P/Sales Sector	Relative	$35.83	1.70x	yes	Revenue $0.35B × sector P/S 6.0x
PEG Fair Value	Relative	$37.77	1.61x	yes	FFO/share $5.21 × (PEG 1.5 × growth 4.8% (input: historical FFO/share growth, 10y median)) → PE 7.2x
Earnings Yield	Earnings	$56.32	1.08x	yes	FFO/share $5.21 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	$74.74	0.81x	yes	FFO/share $5.21 × 14.3x P/FFO (route cohort median, n=85); FFO $0.30B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 58M
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net debt (REIT basis)	$1.2b
Net debt / FFO	4.02x
Fixed-charge coverage (FFO basis)	6.1x
Funds from operations (trailing)	$303.1m
Share count CAGR (dilution)	0.2%
Burning cash	no

REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other.

Bullet Takeaways

• A single-tenant industrial and warehouse REIT mid-transition into a focused logistics portfolio, signing second-generation leases at double-digit rent spreads (base rent up 19.1%, cash base rent up 11.9% in the first quarter) as below-market leases roll to today's rents.

• The biggest risk is the single-tenant income profile: with each building leased to one occupant, a non-renewal leaves a whole asset dark at once, which makes the releasing cadence lumpier than a multi-tenant landlord's and the FFO line more sensitive to a few large expirations.

• Watch the releasing spreads and the 2026 Adjusted Company FFO guidance, raised in June to $3.30 to $3.40 per share; the durability of those double-digit spreads as the industrial supply wave is absorbed is the variable that decides the cash-flow trajectory.

Bull Case

The strongest thing a landlord can own right now is a lease that was signed years ago at a rent the market has since outrun. Industrial rents climbed hard through the logistics build-out, and a portfolio of older single-tenant warehouses carries a backlog of leases still priced below where new space rents today. As those leases expire, LXP re-signs them at current rates, and the gap shows up as growth that costs nothing to build. In the first quarter the company signed 1.8 million square feet of new and extended second-generation leases with base rent up 19.1% and cash base rent up 11.9%. That is the engine: same buildings, same tenants, higher rent.

It runs against a tight portfolio. The stabilized assets were 96.6% leased, and same-store net operating income grew 2.0% in the quarter. The strategic story behind the numbers is a company pruning a once-diversified portfolio down to single-tenant industrial, selling the assets that do not fit and concentrating on warehouse and distribution space in growth markets. The transition is most of the way through, which is why the headline revenue can dip in a given quarter even as the remaining portfolio's cash flow improves; the company is shrinking to its best assets, not growing for the sake of size.

Capital discipline shows up in the share count and the leverage. Shares outstanding are essentially flat, growing about 0.2% a year, and in the first quarter the company was buying its own shares back near $48.70 rather than issuing them. Net debt sits near four times funds from operations with fixed-charge coverage of 6.1 times, comfortable enough that the company is returning capital rather than defending the balance sheet. Management raised the 2026 Adjusted Company FFO outlook in June to a range of $3.30 to $3.40 per share, an upward revision that says the releasing engine is running ahead of plan. For the bull, this is a focused industrial portfolio with embedded rent upside, buying back stock while it compounds.

Bear Case

A single tenant is a binary. When a multi-tenant center loses one occupant it loses a slice of income; when a single-tenant warehouse loses its occupant, the whole building goes to zero rent at once, and it stays there until a replacement is found, fitted out, and moved in. That structure is what sits underneath LXP's cash flow, and it is why the market does not give the stock a growth multiple. Priced on after-maintenance cash flow, the stock yields about 9.3% on AFFO, a yield that wide does not come from a portfolio the market believes will compound smoothly; it comes from one the market wants paid for the lumpiness. The value lenses agree the price is not demanding: peer multiples, earnings power, and the forward cash-flow methods all sit at or slightly below the price. This is not an overvaluation bear. It is a quality-of-cash-flow bear.

The releasing engine that the bull leans on is also the bear's fault line. Those double-digit rent spreads exist because old leases were signed below today's market, but that mark-to-market is a one-time harvest, not a permanent rate of growth. It runs only as long as expiring leases were genuinely below market and as long as market rents hold. The industrial sector absorbed a large wave of new warehouse supply during the build-out, and where that supply landed, asking rents have softened. If the spreads compress as the below-market backlog is worked off, the internal-growth story fades to roughly the pace of contractual bumps, and the cash-flow trajectory the price assumes flattens.

Then there is the financing. Net debt near four times funds from operations is reasonable for a REIT, but coverage of 6.1 times is tighter than a more conservatively levered peer, and a single-tenant industrial portfolio refinances into whatever rate the market offers when the maturities come due. As a long-duration income asset, the stock competes against the 10-year Treasury; a covered distribution near a 5% yield is attractive against today's rates and less so if long rates rise. The transition adds execution risk on top: the company is still selling assets to reach its target portfolio, and dispositions at soft cap rates trade tomorrow's FFO for today's balance-sheet cleanup. The honest bear is not that LXP is expensive. It is that the price reflects exactly what it should, a lumpier single-tenant cash flow whose best growth lever is a finite mark-to-market, financed against rates the company does not set.

Valuation

Strip a warehouse REIT's reported funds from operations down to the cash that survives the recurring spending the buildings require, the roof work, the leasing costs, the tenant improvements, and what remains is AFFO. That is the number the price actually buys. On AFFO, LXP yields about 9.3%, which is to say the price is roughly 10.7 times the after-maintenance cash the portfolio throws off. Gross funds from operations is the larger figure AFFO refines; the after-maintenance yield is the honest one, and at 9.3% it tells you the market is paying for a high current cash return rather than for growth.

That framing matters because the price is not betting on a steep growth path. A 9.3% AFFO yield is a value yield, not a compounder's multiple, and the price does not require the cash flow to accelerate to justify it; it requires the current cash to hold. What the company is printing, same-store NOI up 2.0% in the quarter and second-generation leases re-signed at double-digit spreads, supports holding and modestly growing that cash, which is why the value methods land where they do.

The methods we use to triangulate point the same direction, and the pattern is the signal. Peer multiples, earnings power, and the forward cash-flow methods all sit at or slightly below the price, meaning each of those lenses reads the stock as fairly priced or even a touch cheap. The lone dissenter is the asset-based lens, which sits far above the price and reads it as expensive. For real estate that flag carries little weight: the asset-and-return methods measure depreciated book value or the return the capital must earn on equity, not the lease income the buildings actually produce, so they systematically understate a portfolio whose worth is long-dated rent. The honest read of the spread is a value or asset-supported name, not a growth bet, with the cash-flow lenses defending the price and only the depreciation-based lens objecting.

Leverage rounds it out, read for a REIT against funds from operations rather than depreciation-reduced operating income. Net debt near $1.2 billion is about four times FFO, and fixed-charge coverage is 6.1 times, so the cash flow clears the interest bill with room, and the company was buying back shares in the quarter rather than issuing them. A REIT covering its distribution and its interest out of rent is not burning cash. The single open question the numbers cannot close is durability: the price assumes the single-tenant releasing engine keeps producing cash at this level as the industrial supply wave is absorbed and as the portfolio transition finishes, and that is what the next several lease rolls will settle.

Catalysts

The first-quarter results showed the releasing engine running and the headline accounting masking it. LXP reported a small net loss of $(0.03) per diluted share, largely because property-sale gains were lower than the prior year, but Adjusted Company FFO came in at $0.80 per diluted share, up 2.6% from $0.78. The operating signal sat in the leasing: 1.8 million square feet of new and extended second-generation leases at base-rent and cash-base-rent increases of 19.1% and 11.9%, with the stabilized portfolio 96.6% leased and same-store NOI up 2.0%. The net loss is an artifact of the disposition program; the cash story underneath it improved.

The forward signal came in June, when management raised 2026 Adjusted Company FFO guidance to $3.30 to $3.40 per diluted share, up from the $3.22 to $3.37 range set at the start of the year. An upward guidance revision mid-year, alongside roughly 325,000 shares repurchased near $48.70 in the first quarter, is management putting capital behind its own stock while the releasing spreads outrun the original plan.

From here the watch items are the rent spreads on the next lease rolls, which decide whether the mark-to-market upside has further to run, and the disposition pace, which determines how much near-term FFO is traded away to finish the portfolio transition. The next quarterly print is the readout on both, with the durability of the double-digit spreads as the industrial supply is absorbed the single most important variable for the cash-flow trajectory.

Peer Cohorts (Per Segment, With Filing Citations)

Single-tenant real estate (single segment) (reported)

• STAG (STAG Industrial, Inc.)
• FY2025 10-K: …other tenant billings for insurance, real estate taxes and certain other expenses ("other billings"). For a detailed reconciliation of our same store total operating revenue to net income, see the table above. Same store rental income, which is comprised of lease income and other billings as discussed below,…
• FY2025 10-K: …that offer relative value across CBRE-EA Tier 1 industrial property types and tenants through the principled application of our proprietary risk assessment model, (ii) provide growth through 34 Table of Contents sophisticated industrial operation and an attractive opportunity set, and (iii) capitalize our business…
• FR (FIRST INDUSTRIAL REALTY TRUST, INC.)
• FY2025 10-K: T I THE COMPANY Item 1. Business Background First Industrial Realty Trust, Inc. is a self-administered and fully integrated real estate company which owns, manages, acquires, sells, develops and redevelops industrial real estate. The Company is a Maryland corporation organized on August 10, 1993 and a real estate…
• FY2025 10-K: …its operating partnership, First Industrial, L.P. (the "Operating Partnership"), and its consolidated subsidiaries. We began operations on July 1, 1994. The Company's operations are conducted primarily through the Operating Partnership, of which the Company is the sole general partner (the "General Partner"), with an…
• EGP (EASTGROUP PROPERTIES, INC.)
• FY2025 10-K: …other factors which may not necessarily be offset by increased rents; • changes in the price of oil; • construction costs; and • weather-related and climate-related events. We may be unable to compete for properties and tenants . The real estate business is highly competitive. We compete for interests in properties…
• FY2025 10-K: …The Company has developed approximately 50% of its total portfolio (on a square foot basis), which includes real estate properties and development and value-add properties in lease-up and under construction. The Company's focus is the ownership of business distribution space (91% of the total portfolio) with the…
• REXR (Rexford Industrial Realty, Inc.)
• FY2025 10-K: , and the 12 properties aggregating approximately 0.8 million rentable square feet that were sold during 2025 and 2024. As of December 31, 2025 and 2024, our Same Property Portfolio occupancy was approximately 96.5% and 96.4%, respectively. For the years ended December 31, 2025 and 2024, our Same Property Portfolio…
• FY2025 10-K: …Amounts in thousands. (3) Calculated as annualized base rent for tenants in such industry divided by annualized base rent for the total consolidated portfolio as of December 31, 2025. (4) Calculated as annualized base rent for tenants in such industry divided by occupied square feet for tenants in such industry as of…
• TRNO (Terreno Realty Corporation)
• FY2025 10-K: …$ 0.1 million and $ 0.2 million, respectively, and unamortized fair value adjustment of approximately $ 2.5 million and $ 3.6 million, respectively, which bore interest at a weighted average fixed annual rate of 3.9 %. The mortgage loan payable is collateralized by one property, is non-recourse and requires monthly…
• FY2025 10-K: …rental rates for that same space. We had a tenant retention ratio for the operating portfolio of 67.9% and 70.2%, respectively, for the three months and year ended December 31, 2025. We had a tenant retention ratio for the improved land portfolio of 0% and 74.1%, respectively, for the three months and year ended…
• PLD (Prologis, Inc.)
• FY2025 10-K: 29 (1) Included in other real estate investments were principally: (i) land parcels we own and lease to third parties; (ii) renewable energy assets, including solar, electric vehicle charging and energy storage; (iii) non-strategic real estate assets that we do not intend to operate long term; (iv) newly developed and…
• FY2025 10-K: …of Income and within Note 18 to the Consolidated Financial Statements and to the respective amounts in our same store portfolio analysis for the three months ended December 31 (dollars in millions): Three Months Ended March 31, June 30, September 30, December 31, Full Year 2025 Rental revenues $ 1,987 $ 2,026 $ 2,054…
• WPC (W. P. Carey Inc.)
• FY2025 10-K: …revenues totaling $ 180.3 million were comprised of $ 164.5 million in lease revenues and $ 15.8 million in other income from 80 consolidated self-storage properties, 13 consolidated hotels, and two consolidated student housing properties. We derive self-storage revenue primarily from rents received from customers…
• FY2025 10-K: …properties decreased by $ 802.1 million from December 31, 2024 to December 31, 2025 ( Note 16 ). W. P. Carey 2025 10-K - 76 Notes to Consolidated Financial Statements Acquisitions of Operating Real Estate During 2024 - We entered into one self-storage operating property investment, which was deemed to be a real…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

LXP business update, June 2026 · LXP Q1 2026 results, April 2026