Analyst Note| Yousuf Hafuda |
Vornado Realty reported mixed second-quarter results, with the newly signed Facebook lease providing a boost to sentiment surrounding the Manhattan office market. The company reported adjusted funds from operations of $0.55 per share for the second quarter of 2020, compared with $0.91 per share for the second quarter of 2019. The steep decline accounts for various impacts that are one-time in nature, with results for the core portfolio declining somewhat. Vornado’s results have exposure to revenue that is hit by the coronavirus pandemic, such as parking, signage, and trade show space. With second-quarter results failing to provide any major surprises, we are maintaining our $58 fair value estimate for no-moat-rated Vornado.