NEW YORK ( TheStreet) -- Mack-Cali Realty (NYSE: CLI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • MACK-CALI REALTY CORP has improved earnings per share by 5.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MACK-CALI REALTY CORP reported lower earnings of $0.62 versus $0.90 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus $0.62).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, MACK-CALI REALTY CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • 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 decreased by 7.2% when compared to the same quarter one year ago, dropping from $19.23 million to $17.83 million.

Mack-Cali Realty Corporation is a real estate investment trust (REIT). It engages in the leasing, management, acquisition, development, and construction of commercial real estate properties in the United States. The company has a P/E ratio of 40.2, equal to the average real estate industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Mack-Cali has a market cap of $2.2 billion and is part of the financial sector and real estate industry. Shares are down 22.2% year to date as of the close of trading on Monday.

You can view the full Mack-Cali Ratings Report or get investment ideas from our investment research center.
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