On Monday, Truist Securities adjusted its price target for Veris Residential (NYSE:VRE) shares, increasing it to $15.00 from the previous $14.00, while keeping a Hold rating on the stock. The adjustment follows a revision of the firm's funds from operations (FFO) estimates for 2024.
The revised 2024 FFO estimate now stands at $0.51 per share, down from $0.55 per share. This change is attributed to rebranding efforts and severance or compensation costs that were incurred in the first quarter of 2024.
However, when excluding these one-time expenses and other non-recurring items, the normalized FFO estimate sees a slight decrease to $0.54 per share from the earlier $0.55 per share.
The new normalized FFO estimate aligns with the upper end of the management's guidance range of $0.50 to $0.54 per share. Furthermore, it is slightly higher than the consensus estimate of $0.53 per share. This suggests that, despite the reductions, Veris Residential's performance is anticipated to be on the stronger side of expectations.
Truist's revised price target and maintained Hold rating reflect a cautious but not pessimistic outlook on Veris Residential's stock. Investors may interpret the new target as an indicator of the company's steady, although not aggressive, growth potential in light of the recent financial adjustments.
InvestingPro Insights
Veris Residential's market dynamics and future outlook can be further understood with the help of InvestingPro data. The company currently has a market capitalization of $1.59 billion and a high Price/Earnings (P/E) ratio of -15.92, suggesting that investors are expecting future earnings growth despite current losses. The revenue for the last twelve months as of Q1 2024 stood at $288.64 million, with a notable revenue growth of 16.24%, indicating a solid top-line expansion.
InvestingPro Tips highlight that Veris Residential is expected to see net income growth this year, which could be a positive sign for investors looking for improvement in the company’s profitability. However, it's also noted that short-term obligations exceed liquid assets, which could raise concerns about the company's liquidity in the near term. Additionally, with analysts not anticipating the company to be profitable this year and a high EBITDA valuation multiple, there appears to be a consensus that the stock is trading at a premium relative to its earnings before interest, taxes, depreciation, and amortization.
For investors seeking a more comprehensive analysis and additional insights, InvestingPro offers more tips on Veris Residential. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and access the full suite of tools and data that can help in making more informed investment decisions.
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