2023-04-27 09:33:00 ET
Vornado Realty Trust ( NYSE: VNO ) shares sank 7% in Thursday premarket trading after the office REIT delayed its dividend and authorized up to $200M in share repurchases, in a move that prompted Piper Sandler to downgrade VNO to Underweight from Neutral.
A complete postponement this early in the year suggests more is going on the Wall Street appreciates, analyst Alexander Goldfarb contended in a note to clients.
"A partial reduction would be preferable as it shows better on the underlying cash flows," he explained, while questioning why the company implemented the stock buyback program "if cash preservation is so critical."
In January, the New York-based office owner paid out a quarterly dividend of $0.375 per share, marking a reduction of 29.2% from the prior payout. When compared with peers, the Quant system viewed the attractiveness of VNO's dividend growth rate with an "F" grade, while the attractiveness of the dividend yield itself was marked with as an "A."
Goldfarb's Underweight rating aligns with the Quant rating of Strong Sell and diverges from the average Wall Street analyst rating of Hold.
More on Vornado Realty Trust
For further details see:
Vornado Realty stock tanks as dividend delay prompts downgrade at Piper