Piedmont Office Realty Trust Inc. Stock Downgraded (PDM)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Piedmont Office Realty (NYSE: PDM) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and feeble growth in the company's earnings per share.

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Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.8%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 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, PIEDMONT OFFICE REALTY TRUST underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for PIEDMONT OFFICE REALTY TRUST is rather low; currently it is at 24.85%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 26.21% trails that of the industry average.

Piedmont Office Realty Trust, Inc. engages in the acquisition and ownership of commercial real estate properties in the United States. Its property portfolio primarily consists of office and industrial buildings, warehouses, and manufacturing facilities. Piedmont Office has a market cap of $2.92 billion and is part of the financial sector and real estate industry. Shares are down 2.4% year to date as of the close of trading on Wednesday.

You can view the full Piedmont Office Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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