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Vornado Realty (VNO) Up 2.5% Since Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Vornado Realty Trust VNO. Shares have added about 2.5% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is VNO due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Vornado Realty Q1 FFO and Revenues Beat Estimates

Vornado reported first-quarter 2018 adjusted FFO per share with assumed conversions of 91 cents, beating the Zacks Consensus Estimate of 89 cents. Further, the figure surpassed the prior-year quarter tally of 84 cents.

Total revenues came in at $536.4 million in the reported quarter, surpassing the Zacks Consensus Estimate of $527.6 million. Moreover, total revenues increased 5.6% year over year.

Results reflected growth in occupancy and same-store NOI in the New York portfolio.

Behind the Headline Numbers

In the New York portfolio, 424,000 square feet of office space and 77,000 square feet of retail space were leased in the reported quarter. Also, 119,000 square feet and 89,000 square feet of space in theMart and 555 California Street, respectively, were leased.

At the end of the reported quarter, occupancy in the New York portfolio was 96.9%, down 30 basis points (bps) sequentially while improving 30 bps year over year. Occupancy in theMART was 99.1%, up 50 bps sequentially and 20 bps year over year. Further, occupancy in 555 California Street was 97.8%, rising 360 bps sequentially and 470 bps year over year.

During the first quarter, same-store NOI at share increased 4% year over year for the New York portfolio. The same for theMART and 555 California Street grew 3.4% and 12.3%, respectively, year over year.

As of Mar 31, 2018, Vornado had nearly $1.3 billion of cash and cash equivalents, down from $1.8 billion as of the end of the prior-year.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.

Vornado Realty Trust Price and Consensus

 

Vornado Realty Trust Price and Consensus | Vornado Realty Trust Quote

VGM Scores

At this time, VNO has a subpar Growth Score of D, though it is lagging a bit on the momentum front with an F. Charting a somewhat similar path, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate investors will probably be better served looking elsewhere.

Outlook

VNO has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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