Camden Property Trust's Q3 2025 Earnings: A Contrarian Buy Amidst Public-Private Valuation Dislocation?

The real estate investment trust (REIT) sector has long been a battleground for valuation dislocations between public and private markets. As of Q3 2025, the cap rate spread between public and private real estate stands at 132 basis points-a persistent gap that has outlasted historical norms by a year, according to a Wealth Management analysis. Against this backdrop, Camden Property Trust (CPT) has delivered mixed but strategically significant results in its third-quarter 2025 earnings report, raising questions about its potential as a contrarian buy. This analysis evaluates CPT's performance through the lens of share buybacks, portfolio optimization, and 2026 growth prospects, while contextualizing its valuation within the broader public-private dislocation.

Q3 2025 Earnings: Stability Amidst Marginal Growth

Camden Property Trust reported Q3 2025 earnings per share (EPS) of $1.00, a stark improvement from a $0.04 loss in the same period in 2024, according to a TradingView report. Funds from Operations (FFO) rose to $1.67 per diluted share, while Core FFO dipped slightly to $1.70 per share from $1.71 in 2024, as noted in the TradingView report. Core Adjusted FFO (Core AFFO), a metric that accounts for recurring operating cash flow, fell to $1.43 per share, down from $1.48 in Q3 2024, according to the TradingView report.

Property revenues increased to $395.7 million, up 2.2% year-over-year, with occupancy rates stabilizing at 95.5%, as reported in the TradingView report. However, net operating income (NOI) remained flat, as rising property expenses-up 2.3% year-over-year-offset modest revenue gains. This highlights a key challenge for CPT: maintaining profitability in a market where cost pressures are outpacing rental growth.

Strategic Share Buybacks and Portfolio Optimization

Camden's management has taken decisive steps to enhance shareholder value. In Q3 2025, the company repurchased 465,742 shares at an average price of $107.33 per share, totaling $50.0 million, according to the TradingView report. This aggressive buyback program signals confidence in the stock's intrinsic value, particularly as the company's shares trade at a discount to historical averages.

Portfolio optimization has also been a focal point. CPT disposed of three communities-two in Houston and one in Dallas-comprising 626 apartment units for $113.5 million, recognizing a $85.6 million gain, according to the TradingView report. These dispositions align with a broader strategy to streamline operations and redeploy capital into higher-growth markets. For instance, the completion of the lease-up at Camden Durham in North Carolina and the construction of Camden Village District in Raleigh underscore the company's commitment to revitalizing its portfolio, as noted in the TradingView report.

Public-Private Valuation Dislocation: A Contrarian Opportunity

The 132-basis-point cap rate spread between public and private REITs remains a critical factor in CPT's valuation thesis, according to a Wealth Management analysis. Historically, such dislocations have corrected within two years, but this cycle has persisted for three years, creating an asymmetric opportunity for investors, as noted in a REIT analysis.

Camden's current valuation multiples further support a contrarian case. As of November 2025, the stock trades at a P/FFO of approximately 11.9x and a P/Core AFFO of 13.8x, well below the sector average, according to the TradingView report. These metrics suggest undervaluation, particularly when compared to private market appraisals, which remain stubbornly high. With the Federal Reserve signaling potential rate cuts in 2026, the cap rate spread is likely to narrow, amplifying CPT's upside potential.

2026 Growth Potential: Management's Optimistic Outlook

Camden's management has raised its 2025 Core FFO guidance to $6.85 per share, citing outperformance in Q3 and positive fourth-quarter expectations, according to the TradingView report. Looking ahead, CEO Rick Campo emphasized in the Q3 earnings call that "apartments and our shares are on sale, but not for much longer," signaling confidence in near-term recovery, according to a Reuters summary.

The company's strategic initiatives are poised to drive 2026 growth. Reduced construction costs and a projected 3-3.5% rent growth in 2026, driven by declining supply pressures, position CPT to capitalize on market normalization, according to the Reuters summary. Additionally, the absence of significant debt maturities until Q4 2026 provides financial flexibility for further buybacks or development projects, according to the Reuters summary. Analysts project a median 12-month price target of $119.75, implying a 17.1% upside from current levels, as noted in the Reuters summary.

Conclusion: A Case for Strategic Entry

Camden Property Trust's Q3 2025 results reflect a company navigating a challenging macroeconomic environment with disciplined capital allocation and strategic portfolio management. While near-term metrics like Core AFFO show slight declines, the broader narrative of undervaluation, aggressive buybacks, and a narrowing public-private cap rate spread creates a compelling case for a contrarian buy. Investors willing to tolerate short-term volatility may find CPT's 2026 growth trajectory-and its alignment with broader market corrections-particularly attractive.