BTIG maintains Buy rating, $26 target on Veris Residential stock

Tuesday, shares of Veris Residential (NYSE:VRE), currently trading at $15.59, are in focus following the reiteration of a Buy rating and a $26.00 price target by BTIG. The firm’s analyst highlighted the company’s potential acquisition of a 15% stake in Urby Harborside, which would value the 762-unit tower at approximately $430 million. According to InvestingPro data, the stock appears overvalued relative to its Fair Value, despite showing high shareholder yield and strong liquidity metrics.

On April 21, 2025, reports emerged that Veris Residential is close to finalizing a deal to purchase its joint venture partner’s share in the residential tower, Urby Harborside. This acquisition is seen as a strategic move since Veris Residential’s predecessor commenced the Urby Harborside project in 2013 after acquiring Roseland Partners in 2012. The property, located on the Jersey City waterfront, was developed and managed by Ironstate Properties, with Veris Residential holding an 85% stake in the joint venture.

The consolidation of ownership would enable Veris Residential to fully benefit from the asset’s cash flow, shifting from receiving periodic joint venture distributions to incorporating the building into its operating platform. Veris Residential’s management has notably improved operating margins by 980 basis points over the past four years, contributing to its impressive gross profit margin of 59.71%. With an EBITDA of $125.48 million and a market capitalization of $1.58 billion, the company maintains a solid financial position, as evidenced by its healthy current ratio of 1.22.

The estimated valuation of $564,000 per unit for Urby Harborside is considered favorable, especially when compared to a similar transaction in July 2024, where Hines acquired two newly developed properties totaling 408 units for $221.5 million, or $543,000 per unit. The valuation also presents a significant discount to the estimated replacement costs in Jersey City, which range from $650,000 to $750,000 per unit depending on the location and quality of finish.

Investors and analysts are advised to look forward to Veris Residential’s first-quarter earnings call scheduled for April 24, 2025, where updates to the firm’s estimates are expected to be provided. For deeper insights into VRE’s financial health and valuation metrics, InvestingPro subscribers can access comprehensive analysis, including additional ProTips and a detailed Pro Research Report, which is part of the platform’s coverage of over 1,400 US equities.

In other recent news, Veris Residential reported its fourth-quarter 2024 earnings, showing a net loss of $0.13 per share, slightly missing analysts’ expectations of a $0.11 loss. However, the company posted revenue of $68.08 million, surpassing the forecast of $67.36 million, indicating strong top-line performance despite the earnings shortfall. Veris Residential declared a cash dividend of $0.08 per common stock for the first quarter ending March 31, 2025, maintaining its practice of distributing dividends. The company also announced plans to sell $300 to $500 million in assets over the next 12 to 24 months and may buy back up to $100 million in stock. Evercore ISI recently downgraded Veris Residential from Outperform to In Line, citing concerns about the company’s strategic direction in a challenging capital market environment. Despite acknowledging Veris Residential’s solid operating platform and better-than-expected same-store results, Evercore ISI adjusted its price target to $18.00 from $20.00. The downgrade reflects the uncertainty surrounding a large-scale monetization event and the company’s tactical asset sale strategy. Veris Residential’s strategic initiatives include renovations and technology integration to enhance shareholder value and reduce leverage.

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