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Vornado (VNO) Focuses of Value Creation: Should You Hold?

DRE VNO DCT SRG

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We updated our research report on Vornado Realty Trust (VNO - Free Report) on Nov 21, 2016. This NY-based real estate investment trust (REIT) is the owner and manager of commercial real estate in the United States. It has a portfolio that is primarily concentrated in the New York City and Washington D.C. areas.

On Oct 31, the board of trustees of the company approved a tax-free spin-off of its Washington, DC business. This deal is in sync with Vornado’s value creation strategy which will produce three top-class REITs - Vornado itself, Urban Edge Properties and JBG SMITH. Further, the $4.8 billion deal is likely to turn the company into a New York-based office and retail REIT.

The company reported third-quarter 2016 funds from operations (“FFO”) per share of $1.24, which missed the Zacks Consensus Estimate of $1.28. The adjusted FFO per share for the third-quarter 2015 was $1.21.

The stock presently carries a Zacks Rank #3 (Hold). Over the past seven days, its current quarter estimates remained unchanged at $1.32 per share.

VORNADO RLTY TR Price

 

Some better-ranked stocks in the same space include Seritage Growth Properties (SRG - Free Report) , Duke Realty Corporation (DRE - Free Report) and DCT Industrial Trust Inc. (DCT - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Seritage Growth Properties’ current-quarter estimates have moved up 1.7% over the past one month to 59 cents.

Duke Realty’ current-quarter estimates have moved up 3.3% over the past one month to 31 cents.

Current-quarter estimates for DCT Industrial Trust remained unchanged at 56 cents over the past month.

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. All EPS numbers presented in this write up represent FFO per share.

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