Compass Point Lowers PT on First Potomac Realty Trust to $17.50

Compass Point has published a research report on First Potomac Realty Trust

and has lowered the price target from $18 to $17.50. In the report, Compass Point writes, "Despite the recent negative headlines on the DC real estate market, we continue to view FPO as a undervalued contrarian call, particularly given the $12.50 stock price which is effectively pricing in no new leasing or any value for the company's land. We believe that, at these current levels, the stock price remains at an attractive entry point given the continued strength in leasing in both 2Q11 and 3Q11. The company trades at a 9.73% cap rate versus the sector average of 6-7%, and should sentiment turn back towards the DC market, which has been a consistently strong office market through multiple government cycles, we see the stock returning to our $17.50 price target, which is based on an 8.0% cap rate." Compass Point maintains its Buy rating on First Potomac Realty Trust, which is currently trading down $0.10 from yesterday's $12.72 closing price.