Barclays has cut its 2016 funds from operations (FFO) estimate for Vornado Realty Trust VNO after lower-than-expected first quarter FFO.
Vornado's first-quarter reported FFO of $1.07 was $0.22 below Barclays estimate and $0.15 below the consensus. Core FFO of $1.08 (+0.9 percent year-over-year), which backs out certain items for comparability, was also missed Barclays estimate ($1.29) and the consensus as well.
Vornado benefited from the New York office assets, while retail moderated. New York office and street retail saw positive rental spread gains, but occupancy declined year-over-year and sequentially.
As a result, the brokerage cut its 2016 FFO estimate to $4.94 a share from $5.24 a share. Consensus estimate for 2016 FFO is $4.98 a share.
"Our estimates imply +1% year-over-year operating FFO growth in 2016, +13% in 2017 and a five year average of +6%. Our five-year CAGR for CAD is 14%," analyst Ross Smotrich wrote in a note.
Smotrich has an Equal-Weight rating on the stock.
Meanwhile, Smotrich raised his price target on the stock by $4 to $103. Vornado shares were up 1.09 percent to $98.71.
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