Rating Change #8
SL Green Realty Corporation (SLG) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 87.7% when compared to the same quarter one year ago, falling from $119.05 million to $14.62 million.
- The gross profit margin for SL GREEN REALTY CORP is currently lower than what is desirable, coming in at 29.70%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 4.80% significantly trails the industry average.
- In its most recent trading session, SLG has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- SL GREEN REALTY CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SL GREEN REALTY CORP increased its bottom line by earning $2.93 versus $0.64 in the prior year. For the next year, the market is expecting a contraction of 45.6% in earnings ($1.60 versus $2.93).
- SLG, with its decline in revenue, underperformed when compared the industry average of 11.1%. Since the same quarter one year prior, revenues slightly dropped by 7.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
SL Green Realty Corp. is a real estate investment trust (REIT). The firm engages in the property management, acquisitions, financing, development, construction, and leasing. It also provides tenant services to its clients. The firm invests in real estate markets of the United States. The company has a P/E ratio of 6.6, below the average real estate industry P/E ratio of 7.5 and below the S&P 500 P/E ratio of 17.7. SL Green has a market cap of $5.6 billion and is part of the financial sector and real estate industry. Shares are up 0% year to date as of the close of trading on Thursday.You can view the full SL Green Ratings Report or get investment ideas from our investment research center.