On Wednesday, Jefferies made an adjustment to the price target of SL Green Realty (NYSE:SLG), reducing it to $45.00 from the previous $46.00, while keeping a Hold rating on the stock. The firm highlighted that SL Green's execution on loan modifications had taken precedence over the shortfall in net operating income (NOI) compared to their estimates for the first quarter of 2024.
The firm noted the potential for consensus estimates to face downward pressure due to increased interest expenses from mortgage refinancing and anticipated lower NOI, despite expectations for an uptick in occupancy rates. The analysts at Jefferies expressed caution, citing their forecast for funds from operations (FFO) per share in 2025 to be 6.8% below the consensus on the Street.
Jefferies also mentioned the possibility of SL Green Realty selling a stake in One Vanderbilt Avenue (OVA), predicting that a 10% sale at a 5% capitalization rate could be positively received by the market. However, despite this potential transaction, the firm's stance remains cautious.
The firm's outlook reflects concerns over the real estate company's financial performance and market position, especially in light of the anticipated changes in the real estate market and the broader economic environment. Jefferies' maintained Hold rating suggests a neutral perspective on the stock's near-term growth potential.
InvestingPro Insights
Following the recent analysis by Jefferies on SL Green Realty (NYSE:SLG), it's insightful to consider the latest data from InvestingPro. Despite the challenges outlined, SL Green Realty has demonstrated resilience with a notable 138.24% one-year price total return as of the first quarter of 2024. This performance reflects the company's ability to navigate market volatility, which is evident in its stock price movement, currently trading at 93.56% of its 52-week high with a closing price of $52.41.
InvestingPro Tips suggest that while analysts are anticipating a sales decline in the current year, SL Green has maintained its dividend payments for 28 consecutive years, showcasing a commitment to shareholder returns. Additionally, the company's liquid assets surpass its short-term obligations, indicating a strong liquidity position. It's also worth noting that SL Green has seen a large price uptick over the last six months, with a 72.55% six-month price total return. These metrics are particularly relevant for investors considering the stock's potential for both capital appreciation and income generation.
For those interested in a deeper dive into SL Green Realty's financial health and market prospects, InvestingPro offers additional insights. By using the special coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, which includes access to an even broader range of InvestingPro Tips—there are 11 additional tips available for SL Green Realty to help investors make more informed decisions.
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