The firm set an initial price target of $115 for the New York-based real estate trust.
Credit Suisse said, "our underperform rating on SLG is driven primarily by valuation with the stock trading almost flat to [net asset value], or an implied cap rate of 4.7%"
"The company has the highest percentage exposure to NYC office market in the [real estate investment trust] sector, a market that should continue to see low cap rate s/high valuations due to continued capital inflows from abroad," said Credit Suisse analyst Ian Weissman.
Separately, TheStreet Ratings team rates SL GREEN REALTY CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SL GREEN REALTY CORP (SLG) a BUY. This is driven by a few notable strengths, 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 solid stock price performance, compelling growth in net income, revenue growth, reasonable valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- 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 67.6% when compared to the same quarter one year prior, rising from $41.33 million to $69.25 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 7.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 35.60% is the gross profit margin for SL GREEN REALTY CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.47% trails the industry average.
- You can view the full analysis from the report here: SLG Ratings Report