DEA Stock Forecast & Price Target

Easterly Government Props is attractive because its portfolio is tied almost entirely to mission-critical U.S. government tenants, with about 9.0 million of 10.7 million square feet leased and the top three tenants accounting for 45.9% of annualized lease income, supporting durable cash flows and a high expected retention rate of 93.0%–95.0%. Management’s ability to source accretive acquisitions from a $1.5 billion pipeline should improve as capital costs normalize, while 2Q26 leverage improved to 7.1x net debt to EBITDA and could trend below 7.0x, aiding balance-sheet strength. The stock also appears undervalued relative to its history, trading at an 8.0x 2026E FFO multiple and a 34% discount to NAV, while development projects are expected to add $0.10/share of AFFO accretion and $0.19/share of FFO over the next 2 years.

Easterly Government Props is viewed negatively because its normalized FFO growth appears sluggish, with estimates of $3.11 per share in 2026 and $3.14 in 2027 implying only 3.7% growth in 2026, 1.0% in 2027, and just 0.1% average annual growth from 2026-2031. The outlook is further pressured by an expected FAA move-out in Chicago in 4Q26 that could dilute earnings by $0.14 per share, while low-interest-rate debt maturities and the need to de-lever the balance sheet weigh on flexibility. At the same time, the stock already trades at one of the highest FFO multiples in the coverage area despite a discount to NAV, leaving limited upside if government tenant spending weakens or external growth remains constrained.