SL Green Realty drops further as analysts downgrade after dividend cut, weak guidance
06/12/2022 13:32
** Shares of SL Green Realty Corp SLG.N losing another 1%
premarket as Wall Street analysts downgrade Manhattan-based
office REIT following its investor conference
** SLG shares on Mon closed down 6.3% at $38.06 after co cut
its annual dividend by 13% to $3.25/sh (paid monthly) and 2023
FFO/sh forecast of $5.30-$5.60 was well below Street consensus
of $6.26
** Scotiabank downgrades SLG to "sector underperform" from
"sector perform", reduces PT by $9 to $34
** SLG's balance sheet looks increasingly stressed over the
next year, with risks of additional future dividend cuts,
Scotiabank analyst Nicholas Yulico said
** Operating outlook for NYC office more challenged into
year-end, Yulico said, and occupancy guidance for 2023 may prove
optimistic
** BMO downgrades SLG to "market perform" from "outperform",
reduces PT by $6 to $41
** Dividend cut was prudent move, but SLG needs to execute
on leasing and dispositions in an uncertain demand environment,
BMO analyst John Kim said
** Baird analyst David Rodgers trims his PT by $1 to $40,
noting that SLG's update took office REIT shares lower and
"should keep the group from rallying near term"
** Other office property stocks lost ground on Mon,
including Vornado Realty Trust VNO.N down ~6%, Boston
Properties Inc BXP.N 4%, Office Properties Income Trust
OPI.O ~3%, Paramount Group Inc PGRE.N >4%
** YTD, SLG shares have lost 48% through Mon vs S&P 1500
Office REIT index's .SPCOMREIO 38% decline
(Lance Tupper is a Reuters market analyst. The views expressed
are his own)
((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-332-219-1430))