Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Will Vornado Realty Trust Shares Hit $115?

By Brian D. Pacampara, CFA - Mar 10, 2014 at 8:29AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Does this analyst make a good case? Or is it just more noise from Wall Street?

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Goldman Sachs resumed coverage on commercial REIT Vornado Realty Trust ( VNO 0.70% )with a conviction buy rating yesterday, suggesting that today's sluggishness might offer a decent entry point.

So what: Along with the bullish call, analyst Brad Burke planted a price target of $115 on the stock, representing about 16% worth of upside to yesterday's close. While contrarians might be turned off by Vornado's price strength over the past six months, Burke thinks there's more room to run given the several positive catalysts still ahead for the company.

Now what: According to Goldman, Vornado's risk/reward trade-off is pretty attractive at this point. "Our positive view is based in part on improvement against easy comps; JC Penney is sold, [Toys R Us] is being ascribed little to no market value, and [Washington, D.C. office portfolio] appears to be at a bottom," said Burke. "An attractive pipeline of development/redevelopment, funded in part by sales of non-core assets, has the dual impact of growing FFO while focusing the portfolio." When you couple that favorable outlook with Vornado's still-juicy dividend yield of 3%, it's tough to disagree with Goldman's ultra-bullish call.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Vornado Realty Trust Stock Quote
Vornado Realty Trust
VNO
$40.42 (0.70%) $0.28

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
656%
 
S&P 500 Returns
144%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.