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Vornado Realty (VNO)
NYSE:VNO
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Vornado Realty
(NYSE:VNO)
Rating:65Neutral
Price Target:
$40.00
▲( 7.85% Upside)
Positive Factors
Financial Position
The sale of a portion of the U.S. flagship store at 666 Fifth Avenue resulted in net proceeds of $342mn, enhancing the company's financial position.
Ground Lease
VNO received a favorable ground lease re-set at PENN 1, resulting in an $11M annual savings and a positive impact on future financial performance.
Leasing Performance
The company leased 709k SF of NY office space, showing a strong leasing performance compared to the previous quarter.
Negative Factors
Lease Payment
Prior to the ground lease's renewal, the lease payment was just $2.5M, but VNO guided to an increase to $26M due to the estimated increased land value, exhibiting the pitfalls of this structure.
Occupancy Rates
Total occupancy decreased to 83.5%, reflecting a decline compared to previous periods.
Vornado Realty (VNO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.74B
Dividend Yield2%
Average Volume (3M)1.21M
Price to Earnings (P/E)71.2
Beta (1Y)1.59
Revenue Growth0.63%
EPS Growth258.59%
CountryUS
Employees2,996
SectorReal Estate
Sector Strength64
IndustryREIT - Office
Share Statistics
EPS (TTM)0.43
Shares Outstanding191,949,160
10 Day Avg. Volume1,019,628
30 Day Avg. Volume1,209,602
Financial Highlights & Ratios
PEG Ratio0.11
Price to Book (P/B)1.43
Price to Sales (P/S)0.00
P/FCF Ratio43.54
Enterprise Value/Market Cap0.91
Enterprise Value/Revenue0.98
Enterprise Value/Gross Profit3.88
Enterprise Value/Ebitda2.07
Forecast
1Y Price Target
$39.67Price Target Upside6.96% Upside
Rating ConsensusHold
Number of Analyst Covering10
Vornado Realty Business Overview & Revenue Model
Company DescriptionVornado's portfolio is concentrated in the nation's key market New York City along with the premier asset in both Chicago and San Francisco. Vornado is also the real estate industry leader in sustainability policy. The company owns and manages over 23 million square feet of LEED certified buildings and received the Energy Star Partner of the Year Award, Sustained Excellence 2019. In 2012, Vornado commemorated 50 years on the NYSE.
How the Company Makes MoneyVornado Realty Trust generates revenue primarily through leasing its vast portfolio of office and retail properties to tenants. The company earns rental income, which constitutes the majority of its revenue, from long-term leases with various tenants, ensuring a steady cash flow. Additionally, Vornado engages in property development and management services, further augmenting its earnings. The company's strategic focus on high-demand urban locations, particularly in Manhattan, allows it to command premium rental rates. Furthermore, Vornado's revenue is bolstered by strategic partnerships and joint ventures that enable it to expand its reach and optimize its portfolio value. The REIT structure also allows Vornado to distribute a significant portion of its taxable income as dividends to shareholders, aligning with its business model and investor expectations.
Vornado Realty Financial Statement Overview
Summary
Vornado Realty demonstrates a commendable financial recovery with improved profitability metrics and a stable balance sheet. The company's cash flow position is healthy, though reliant on consistent income levels. While leverage is within industry norms, profitability could be enhanced to deliver better returns to shareholders. Continued focus on revenue growth and efficient operations can further strengthen its financial standing.Income Statement
Vornado Realty shows a strong recovery in profitability with a TTM net profit margin of 9.17%, up from previous years, reflecting effective cost management. The EBIT and EBITDA margins are also robust, at 15.58% and 55.15% respectively, indicating efficient operations. Despite a modest revenue growth of 1.41% TTM, the company has improved its gross profit margin significantly by eliminating cost of goods sold, which now reflects total revenue.72
Positive
Balance Sheet
Vornado Realty's balance sheet indicates a stable equity position with a debt-to-equity ratio of 1.60, suggesting moderate leverage typical for the REIT industry. The equity ratio remains strong at 34.06%, showing a solid asset base funded by equity. However, the return on equity is relatively low at 3.13% TTM, indicating limited profitability relative to shareholder investment.65
Positive
Cash Flow
The company maintains a healthy operating cash flow to net income ratio of 3.36, reflecting strong cash generation relative to earnings. Free cash flow remains positive with a growth rate of 3.82%, supporting financial flexibility. However, reliance on operating cash flow highlights potential vulnerabilities if income fluctuates.68
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.81B | 1.79B | 1.81B | 1.80B | 1.59B | 1.53B | Gross Profit |
| 1.81B | 1.79B | 906.00M | 926.08M | 791.89M | 738.88M | EBIT |
| 282.36M | 263.87M | 815.87M | -175.44M | 380.13M | -171.43M | EBITDA |
| 1000.00M | 880.61M | 845.61M | 423.31M | 792.48M | 228.26M | Net Income Common Stockholders |
| 166.26M | 70.39M | 105.49M | -382.61M | 176.00M | -461.85M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 568.86M | 733.95M | 997.00M | 1.36B | 1.76B | 1.62B | Total Assets |
| 15.60B | 16.00B | 16.19B | 16.49B | 17.27B | 16.22B | Total Debt |
| 8.53B | 8.99B | 8.98B | 9.13B | 8.99B | 7.80B | Net Debt |
| 7.96B | 8.26B | 7.99B | 8.24B | 7.23B | 6.18B | Total Liabilities |
| 9.37B | 9.83B | 9.84B | 9.98B | 10.06B | 8.67B | Stockholders Equity |
| 5.31B | 5.16B | 5.51B | 5.84B | 6.24B | 6.53B |
| Cash Flow | Free Cash Flow | ||||
| 558.27M | 537.72M | 648.15M | 795.94M | 758.81M | 29.19M | Operating Cash Flow |
| 558.27M | 537.72M | 648.15M | 798.94M | 761.81M | 424.24M | Investing Cash Flow |
| -193.24M | -597.37M | -128.79M | -906.86M | -532.35M | -87.80M | Financing Cash Flow |
| -707.07M | -252.32M | -278.94M | -801.27M | -29.48M | -213.20M |
Vornado Realty Technical Analysis
Negative
37.09
Price Trends
36.71
Positive
38.76
Negative
38.81
Negative
Market Momentum
0.46
Positive
46.96
Neutral
9.22
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VNO, the sentiment is Negative. The current price of 37.09 is below the 20-day moving average (MA) of 37.97, above the 50-day MA of 36.71, and below the 200-day MA of 38.81, indicating a neutral trend. The MACD of 0.46 indicates Positive momentum. The RSI at 46.96 is Neutral, neither overbought nor oversold. The STOCH value of 9.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VNO.
Vornado Realty Risk Analysis
Vornado Realty disclosed 42 risk factors in its most recent earnings report. Vornado Realty reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Vornado Realty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Neutral | $7.40B | 18.63 | 3.69% | 6.91% | 1.11% | -3.07% | |
66 Neutral | $11.73B | 89.05 | 0.73% | 7.72% | 5.13% | -28.94% | |
65 Neutral | $7.74B | 71.20 | 3.06% | 2.00% | 0.63% | 258.59% | |
64 Neutral | $4.53B | 80.65 | 1.15% | 4.74% | 10.93% | -31.07% | |
62 Neutral | $11.24B | 732.74 | -0.10% | 6.07% | 3.74% | -102.51% | |
60 Neutral | $2.76B | 10.33 | 0.49% | 8507.90% | 5.95% | -17.56% | |
58 Neutral | $4.22B | 663.10 | -0.13% | 5.46% | 13.36% | 94.82% |
* Real Estate Sector Average
Performance Comparison
VNO
Vornado Realty
37.09
14.32
62.89%
ARE
Alexandria Equities
67.83
-43.49
-39.07%
BXP
Boston Properties
64.61
9.70
17.67%
CUZ
Cousins Properties
27.00
5.36
24.77%
KRC
Kilroy Realty
31.27
0.84
2.76%
SLG
SL Green Realty
55.48
7.66
16.02%
Vornado Realty Earnings Call Summary
Earnings Call Date:May 05, 2025
(Q1-2025)
| % Change Since: 0.24%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook with strong financial performance, major lease agreements, and successful sales and financing activities. Despite some market volatility and a temporary decline in occupancy, the company has demonstrated resilience and growth potential.Q1-2025 Updates
Positive Updates
Strong Stock Performance
Vornado Realty Trust's stock increased by 49% in 2024 after a 36% rise in 2023, outperforming other CBD office companies despite a year-end decline of 12%.
Record-Breaking Sale
Completed the UNIQLO sale at 666 Fifth Avenue at a record-breaking $20,000 per square foot, generating $342 million in net proceeds.
Successful Financing
Completed a $450 million financing at 1535 Broadway, generating $407 million in cash during a volatile market.
Positive Ground Lease Arbitration Outcome
Received a favorable ruling on the PENN 1 ground lease rent reset arbitration, reducing annual rent from $26.2 billion to $15 million.
Major Lease Agreements
Finalized a major 337,000 square foot lease in PENN 2 with Universal Music Group and completed a master lease with NYU at 770 Broadway for 1.1 million square feet.
Increased Liquidity
Reduced debt by $915 million and increased cash by $500 million, leading to a robust liquidity position of $3 billion.
Strong Financial Performance
First-quarter comparable FFO was $0.63 per share, an increase of $0.08 from the previous year and $0.09 higher than consensus.
Negative Updates
Market Volatility Impact
Significant volatility in the financing markets due to new tariff policies, leading to spread widening and delayed issuances.
Occupancy Decline
New York office occupancy decreased to 84.4% from 88.8% due to PENN 2 being placed fully into service, though expected to recover.
Company Guidance
During Vornado Realty Trust's first-quarter 2025 earnings call, several key metrics and financial activities were discussed, highlighting the company's strong performance and strategic actions. Comparable Funds from Operations (FFO) for the quarter was reported at $0.63 per share, an $0.08 increase from the previous year, and $0.09 above consensus expectations. The overall GAAP same-store Net Operating Income (NOI) rose by 3.5%, with significant leasing activity totaling over 1 million square feet, including a major 337,000 square foot lease with Universal Music Group at PENN 2. The company achieved record-breaking sale prices, such as the $20,000 per square foot UNIQLO sale at 666 Fifth Avenue, contributing $342 million in net proceeds. Additionally, Vornado completed a $450 million financing at 1535 Broadway, bolstering its cash reserves to $1.4 billion, alongside undrawn credit lines of $1.6 billion, resulting in a total liquidity of $3 billion. The NYU transaction at 770 Broadway was also highlighted, with a prepaid rent payment of $935 million, contributing to a projected annual accretion of $25 million. Vornado's strategic maneuvers led to a $915 million debt reduction and a $500 million cash increase, with the company's retail JV preferred equity reduced from $1,828 million to $1,079 million. These actions are expected to boost GAAP earnings by approximately $36 million, with significant growth anticipated over the next several years, particularly from the lease-up of PENN 1 and PENN 2, projected to increase NOI by $125 million and $50 million, respectively.Vornado Realty Corporate Events
Shareholder Meetings
Vornado Realty Holds Annual Shareholder Meeting
Neutral
May 22, 2025
On May 22, 2025, Vornado Realty Trust held its annual meeting of shareholders, where approximately 94% of the shares were represented. During the meeting, three key proposals were voted on: the election of ten nominees to the Board of Trustees, the ratification of Deloitte & Touche LLP as the independent public accounting firm for 2025, and a non-binding advisory resolution on executive compensation. The outcomes of these votes are expected to influence the company’s governance and operational decisions in the coming year.
The most recent analyst rating on (VNO) stock is a Sell with a $35.00 price target. To see the full list of analyst forecasts on Vornado Realty stock, see the VNO Stock Forecast page.
Business Operations and Strategy
Vornado Realty Releases 2024 Sustainability Report
Positive
Apr 9, 2025
On April 9, 2025, Vornado Realty Trust announced the release of its 2024 Sustainability Report, highlighting significant achievements in sustainability. The company became the first major real estate entity to achieve 100% LEED certification across its portfolio and received multiple accolades, including the Nareit Impact at Scale Award and Energy Star Partner of the Year. Vornado also reported a 41% reduction in energy consumption and a 59% waste diversion rate, underscoring its commitment to sustainable practices and enhancing tenant satisfaction.
Financial Disclosures
Vornado Realty Reports Decline in 2024 Financial Results
Negative
Apr 8, 2025
On April 8, 2025, Vornado Realty Trust reported its financial results for the year ended December 31, 2024, revealing a significant decline in net income attributable to common shares, which fell to $8.3 million from $43.4 million in the previous year. The company’s Funds from Operations (FFO), as Adjusted, also decreased by $61.1 million, reflecting challenges in tenant-related income and increased net interest expenses. Despite these declines, Vornado’s New York portfolio remains a substantial contributor to its net operating income, accounting for 89.2% of the total. The report highlights the impact of one-time events and adjustments on financial performance, underscoring the company’s ongoing efforts to navigate a complex real estate market.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.