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On Friday, Piper Sandler analysts reaffirmed their positive outlook on SL Green Realty (NYSE: NYSE:SLG) stock, maintaining an Overweight rating and a $72.00 price target. The stock, currently trading at $62.06, has shown strong momentum with a 9.32% gain over the past week. According to InvestingPro analysis, the stock appears overvalued at current levels, with RSI indicating overbought territory. Analysts emphasized the increasing competition for premium office space in Midtown, which is driving rent acceleration in well-equipped, commuter-friendly buildings.
Earlier this week, SL Green Realty participated in Piper Sandler’s pre-NAREIT investor dinner, held at La Tete d’Or, a restaurant located at One Madison. During the event, management highlighted the significant reduction in Park Avenue’s availability between Grand Central and 57th Street, which now stands at approximately 4.5%, compared to an overall availability of 18%. Despite market challenges, the company has maintained dividend payments for 29 consecutive years, currently offering a 4.98% yield.
Analysts noted that the scarcity of prime office space has led to more aggressive bidding from tenants, even in the face of high rent prices. This trend is contributing to the expansion of net operating income (NOI) cash margins for SL Green Realty.
Piper Sandler analysts also pointed out that SL Green Realty is unlikely to face any new material supply of office space in the next decade, further supporting their optimistic view on the company’s future performance.
In other recent news, SL Green Realty Corp reported its first-quarter 2025 financial results, surpassing earnings expectations with an earnings per share (EPS) of -$0.30, beating the forecast of -$0.41. Revenue, however, slightly missed projections, coming in at $144.52 million compared to the expected $145.27 million. Additionally, the company achieved full occupancy at the newly acquired 500 Park Avenue, highlighting its strategic focus on high-quality assets. During its Annual Meeting of Stockholders, SL Green elected eight directors to the board and approved several key proposals, including the executive compensation and the appointment of Deloitte & Touche LLP as its independent registered public accounting firm. The stockholders also ratified the Sixth Amended and Restated 2005 Stock Option and Incentive Plan. These developments indicate SL Green’s ongoing efforts to maintain a robust financial outlook, supported by a strong leasing pipeline and active debt platform. Notably, the company is also focusing on a $1 billion disposition target and plans for significant office-to-residential conversions. Analyst discussions during the earnings call highlighted confidence in continued strong tenant demand, particularly from AI-related businesses, despite broader economic uncertainties.
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