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SL Green (SLG) Down 4.7% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for SL Green Realty Corporation (SLG - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
SL Green reported first-quarter 2017 FFO of $1.57 per share, in line with the Zacks Consensus Estimate. The figure was below the prior-year quarter’s FFO per share of $1.84.
Results mark a decline in quarterly net rental revenues, which fell 18.6% year over year to $281.3 million. Also, it missed the Zacks Consensus Estimate of $283 million.
Quarter in Detail
For the quarter, combined same-store cash net operating income (NOI) rose 2% year over year. Excluding the impact of lease termination income, NOI grew 3.6%.
In the Manhattan portfolio, SL Green inked 44 office leases for 346,345 square feet of space. As of Mar 31, 2017, Manhattan same-store occupancy, inclusive of leases signed but not yet commenced, remained unchanged sequentially and rose 50 basis points (bps) year over year to 96.2%. Importantly, in the first quarter, the mark-to-market on signed Manhattan office leases was 21.6% higher over the previous fully escalated rents on the same spaces.
On the other hand, in the Suburban portfolio, SL Green signed 26 office lease deals for 146,257 square feet of space. Same-store occupancy for the Suburban portfolio, inclusive of leases signed but not yet commenced, was 85.2% as of Mar 31, 2017, down 10 bps sequentially, and up 30 bps year over year. Moreover, in the first quarter, mark-to-market on signed Suburban office leases was 2.5% higher than the previously fully escalated rents on the same spaces.
SL Green exited the quarter with cash and cash equivalents of $468 million, up from $279.4 million at the end of 2016.
Notable Investment Activities
In January, SL Green closed the sale of a 27.6% interest in One Vanderbilt Avenue to NPS and 1.4% interest to Hines. Both NPS and Hines committed equity infusion of not less than $525 million.
Further, in March, the company inked a deal to sell 90% interest in 102 Greene Street for net proceeds of $38 million.
In first-quarter 2017, the company sold around 4.7 million shares of New York REIT, Inc. and gained $3.3 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been four downward revisions for the current quarter compared to three upward.
At this time, SL Green's stock has a subpar Growth Score of 'D', however its Momentum is doing a lot better with an 'A'. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our styles scores, the stock is suitable solely for momentum investors.
Outlook
While estimates have been trending downward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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SL Green (SLG) Down 4.7% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for SL Green Realty Corporation (SLG - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
SL Green’s Q1 FFO Meets Estimates, Revenues Decline
SL Green reported first-quarter 2017 FFO of $1.57 per share, in line with the Zacks Consensus Estimate. The figure was below the prior-year quarter’s FFO per share of $1.84.
Results mark a decline in quarterly net rental revenues, which fell 18.6% year over year to $281.3 million. Also, it missed the Zacks Consensus Estimate of $283 million.
Quarter in Detail
For the quarter, combined same-store cash net operating income (NOI) rose 2% year over year. Excluding the impact of lease termination income, NOI grew 3.6%.
In the Manhattan portfolio, SL Green inked 44 office leases for 346,345 square feet of space. As of Mar 31, 2017, Manhattan same-store occupancy, inclusive of leases signed but not yet commenced, remained unchanged sequentially and rose 50 basis points (bps) year over year to 96.2%. Importantly, in the first quarter, the mark-to-market on signed Manhattan office leases was 21.6% higher over the previous fully escalated rents on the same spaces.
On the other hand, in the Suburban portfolio, SL Green signed 26 office lease deals for 146,257 square feet of space. Same-store occupancy for the Suburban portfolio, inclusive of leases signed but not yet commenced, was 85.2% as of Mar 31, 2017, down 10 bps sequentially, and up 30 bps year over year. Moreover, in the first quarter, mark-to-market on signed Suburban office leases was 2.5% higher than the previously fully escalated rents on the same spaces.
SL Green exited the quarter with cash and cash equivalents of $468 million, up from $279.4 million at the end of 2016.
Notable Investment Activities
In January, SL Green closed the sale of a 27.6% interest in One Vanderbilt Avenue to NPS and 1.4% interest to Hines. Both NPS and Hines committed equity infusion of not less than $525 million.
Further, in March, the company inked a deal to sell 90% interest in 102 Greene Street for net proceeds of $38 million.
In first-quarter 2017, the company sold around 4.7 million shares of New York REIT, Inc. and gained $3.3 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been four downward revisions for the current quarter compared to three upward.
SL Green Realty Corporation Price and Consensus
SL Green Realty Corporation Price and Consensus | SL Green Realty Corporation Quote
VGM Scores
At this time, SL Green's stock has a subpar Growth Score of 'D', however its Momentum is doing a lot better with an 'A'. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our styles scores, the stock is suitable solely for momentum investors.
Outlook
While estimates have been trending downward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.