Wells Fargo analyst Blaine Heck reiterated a Sell rating on Paramount Group (PGRE – Research Report) on April 30 and set a price target of $5.00.
Blaine Heck has given his Sell rating due to a combination of factors impacting Paramount Group’s financial outlook. Despite the company’s Q1 performance exceeding consensus expectations and maintaining its FFO guidance, there are concerns about the sustainability of its leasing activities. The anticipated move-outs in significant markets like San Francisco and New York pose a challenge that may not be fully offset by the current leasing momentum.
Additionally, while the company has improved its leasing outlook and raised its same-store leased rate guidance, the unchanged NOI and fee income guidance suggest limited growth potential. The increase in general and administrative expenses, despite being balanced by reduced interest expenses, indicates potential cost pressures. These factors combined with the uncertainty surrounding future leasing activities contribute to the cautious stance reflected in the Sell rating.
In another report released on April 15, Morgan Stanley also downgraded the stock to a Sell with a $3.25 price target.
PGRE’s price has also changed moderately for the past six months – from $5.050 to $4.290, which is a -15.05% drop .