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Vornado (VNO) Up 9.2% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Vornado (VNO - Free Report) . Shares have added about 9.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vornado 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's Q2 FFO and Revenues Surpass Estimates
Vornado’s second-quarter 2024 FFO plus assumed conversions as adjusted per share of 57 cents surpassed the Zacks Consensus Estimate of 55 cents. However, the figure declined 20.8% year over year.
Results displayed better-than-anticipated top-line growth. Vornado experienced decent leasing activity and higher initial rent in the quarter. However, the total same-store NOI declined year over year. A rise in interest expenses remained a concern for the quarter.
Total revenues came in at $450.3 million in the reported quarter, which beat the Zacks Consensus Estimate of $434.6 million. However, on a year-over-year basis, revenues declined nearly 4.7%.
Quarter in Detail
In the reported quarter, total same-store NOI (at share) came in at $263.8 million compared with the prior-year quarter’s $289.8 million. The metric for the New York, THE MART and 555 California Street portfolios decreased 4.4%, 4.6% and 46.4%, respectively, from the prior-year period.
Operating expenses increased 3% to $229.4 million year over year. Interest expenses rose 12.9% to $98.4 million year over year.
During the quarter, in the New York office portfolio, 1,322,000 square feet of office space (598,000 square feet at share) was leased for an initial rent of $131.37 per square foot and a weighted average lease term of 9.7 years. The tenant improvements and leasing commissions were $6.54 per square foot per annum or 5% of the initial rent.
In the New York retail portfolio, 4,000 square feet were leased (all at share) at an initial rent of $301.14 per square foot and a weighted average lease term of five years. The tenant improvements and leasing commissions were $10.99 per square foot per annum or 3.6% of the initial rent.
At THE MART, 32,000 square feet of space (all at share) was leased for an initial rent of $56.39 per square foot and a weighted average lease term of 7.2 years. The tenant improvements and leasing commissions were $7.86 per square foot per annum or 13.9% of the initial rent.
Additionally, at 555 California Street, 66,000 square feet of office space (47,000 square feet at share) was leased for an initial rent of $99.14 per square foot and a weighted average lease term of 9.8 years. The tenant improvements and leasing commissions were $12.56 per square foot per annum or 12.7% of the initial rent.
Vornado ended the quarter with occupancy in the New York portfolio at 88.3%, down 180 basis points year over year. Occupancy in THE MART declined to 76.9% from 80% reported at the end of the year-ago period. However, occupancy in 555 California Street remained unchanged at 94.5%.
Portfolio Activity
During the second quarter, Vornado sold two condominium units at 220 CPS for a net amount of $31.6 million. It also sold its 49.9% interest in 50-70 West 93rd Street to its joint venture partner for a net amount of $2 million.
Balance Sheet
Vornado exited the second quarter of 2024 with cash and cash equivalents of $872.6 million, down 2.3% from $892.7 million as of Mar 31, 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Vornado has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Outlook
Vornado has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Vornado is part of the Zacks REIT and Equity Trust - Other industry. Over the past month, Public Storage (PSA - Free Report) , a stock from the same industry, has gained 9.3%. The company reported its results for the quarter ended June 2024 more than a month ago.
Public Storage reported revenues of $1.17 billion in the last reported quarter, representing a year-over-year change of +4.8%. EPS of $2.66 for the same period compares with $4.28 a year ago.
Public Storage is expected to post earnings of $4.25 per share for the current quarter, representing a year-over-year change of -1.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.4%.
Public Storage has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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It has been about a month since the last earnings report for Vornado (VNO - Free Report) . Shares have added about 9.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vornado 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's Q2 FFO and Revenues Surpass Estimates
Vornado’s second-quarter 2024 FFO plus assumed conversions as adjusted per share of 57 cents surpassed the Zacks Consensus Estimate of 55 cents. However, the figure declined 20.8% year over year.
Results displayed better-than-anticipated top-line growth. Vornado experienced decent leasing activity and higher initial rent in the quarter. However, the total same-store NOI declined year over year. A rise in interest expenses remained a concern for the quarter.
Total revenues came in at $450.3 million in the reported quarter, which beat the Zacks Consensus Estimate of $434.6 million. However, on a year-over-year basis, revenues declined nearly 4.7%.
Quarter in Detail
In the reported quarter, total same-store NOI (at share) came in at $263.8 million compared with the prior-year quarter’s $289.8 million. The metric for the New York, THE MART and 555 California Street portfolios decreased 4.4%, 4.6% and 46.4%, respectively, from the prior-year period.
Operating expenses increased 3% to $229.4 million year over year. Interest expenses rose 12.9% to $98.4 million year over year.
During the quarter, in the New York office portfolio, 1,322,000 square feet of office space (598,000 square feet at share) was leased for an initial rent of $131.37 per square foot and a weighted average lease term of 9.7 years. The tenant improvements and leasing commissions were $6.54 per square foot per annum or 5% of the initial rent.
In the New York retail portfolio, 4,000 square feet were leased (all at share) at an initial rent of $301.14 per square foot and a weighted average lease term of five years. The tenant improvements and leasing commissions were $10.99 per square foot per annum or 3.6% of the initial rent.
At THE MART, 32,000 square feet of space (all at share) was leased for an initial rent of $56.39 per square foot and a weighted average lease term of 7.2 years. The tenant improvements and leasing commissions were $7.86 per square foot per annum or 13.9% of the initial rent.
Additionally, at 555 California Street, 66,000 square feet of office space (47,000 square feet at share) was leased for an initial rent of $99.14 per square foot and a weighted average lease term of 9.8 years. The tenant improvements and leasing commissions were $12.56 per square foot per annum or 12.7% of the initial rent.
Vornado ended the quarter with occupancy in the New York portfolio at 88.3%, down 180 basis points year over year. Occupancy in THE MART declined to 76.9% from 80% reported at the end of the year-ago period. However, occupancy in 555 California Street remained unchanged at 94.5%.
Portfolio Activity
During the second quarter, Vornado sold two condominium units at 220 CPS for a net amount of $31.6 million. It also sold its 49.9% interest in 50-70 West 93rd Street to its joint venture partner for a net amount of $2 million.
Balance Sheet
Vornado exited the second quarter of 2024 with cash and cash equivalents of $872.6 million, down 2.3% from $892.7 million as of Mar 31, 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Vornado has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Outlook
Vornado has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Vornado is part of the Zacks REIT and Equity Trust - Other industry. Over the past month, Public Storage (PSA - Free Report) , a stock from the same industry, has gained 9.3%. The company reported its results for the quarter ended June 2024 more than a month ago.
Public Storage reported revenues of $1.17 billion in the last reported quarter, representing a year-over-year change of +4.8%. EPS of $2.66 for the same period compares with $4.28 a year ago.
Public Storage is expected to post earnings of $4.25 per share for the current quarter, representing a year-over-year change of -1.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.4%.
Public Storage has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.