The firm set an initial price target of $114 for the New York City-based real estate investment trust.
Credit Suisse said the company boasts strong development/redevelopment pipeline, but earnings growth should be average going forward given the high NYC office occupancy rates and negative re-leasing spreads.
"A significant catalyst for the company is its ability to mark up rents in its NYC street retail portfolio, which could push its [net asset value] and earnings significantly higher," said Credit Suisse analyst Ian Weissman.
Separately, TheStreet Ratings team rates VORNADO REALTY TRUST as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate VORNADO REALTY TRUST (VNO) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 46.6% when compared to the same quarter one year prior, rising from $103.37 million to $151.52 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.7%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to $380.93 million or 10.47% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.00%.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- VORNADO REALTY TRUST has improved earnings per share by 21.2% 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, VORNADO REALTY TRUST swung to a loss, reporting -$0.09 versus $1.46 in the prior year. This year, the market expects an improvement in earnings ($1.81 versus -$0.09).
- You can view the full analysis from the report here: VNO Ratings Report