UPDATE: Citigroup Upgrades Vornado Realty Trust at Buy on Attractive Risk/Reward

Citigroup raised its rating on Vornado Realty Trust

from Neutral to Buy and increased its price target from $82 to $85. Citigroup said, "This is a contrarian call. There are only 2 Buy ratings on the street and buy side sentiment is very weak. Our call is that the VNO story should improve heading into 2013 with BRAC related vacates in DC moving to the rear-view mirror and valuation that is overly discounted. While we have been underweight the shares for a while, we have been intrigued with Vornado all year, Vornado has since announced and begun to execute a simplification plan. Yet, the shares have notably underperformed, and at ~$75, now trade at a ~8% discount to our $81/sh spot NAV vs premiums for the sector. In addition, we see over $13/sh of additional undiscounted value over time above our current NAV (analysis herein). At these levels and with significant liquidity, VNO could launch a share repurchase program. Vornado Realty Trust closed at $74.98 on Tuesday.