Stock market indexes sold off last week and, in the spirit of things, Paramount Group Inc. PGRE dropped to a new 52-week low. On Feb. 24, the company reported fourth-quarter funds from operations (FFO) at $0.25, up one penny from last year’s fourth-quarter FFO of $0.24.
Wall Street analysts had expected greater things so sellers took the real estate investment trust (REIT) further down.
Paramount Group, which owns office buildings in New York and San Francisco, has a market capitalization of $1.15 billion and is now trading at an unusually steep discount from book value of 67%. The price-to-free-cash-flow metric is 5.1. The company’s shareholder equity is slightly exceeded by the amount of long-term debt on the books.
During the fourth quarter of 2022, analysts were busy downgrading their opinion of Paramount Group. In October, BTIG’s research group took its ratings from Buy to Neutral. In November, Evercore Inc. changed its opinion of the REIT from In line to Underperform, with a price target reduction from $8 to $6.50. In the same month, Morgan Stanley downgraded it from Overweight to Equal weight with a reduction of price target from $8 to $6.50.
New York City-based Paramount Group is actively traded with an average daily volume of 1.3 million shares.
The real estate investment trust is paying a 5.84% dividend.
Here’s the daily price chart:
The new low comes after more than a week of relentless selling of the REIT, a definite sign of Wall Street’s displeasure. It can’t be thrilling for existing shareholders to see that Paramount Group is trading below the downtrending 50-day moving average (the blue line) and below the downtrending 200-day moving average.
The weekly chart looks like this:
This real estate investment trust has returned to the area of its lows from October and November 2020. Note how it traded at just above $13 at the beginning of 2020 and now goes for $5.31, a 59% slide from peak to trough.
Not investment advice. For educational purposes only.
Weekly REIT Report: REITs are one of the most misunderstood investment options, making it difficult for investors to spot incredible opportunities until it’s too late. Benzinga’s in-house real estate research team has been working hard to identify the greatest opportunities in today’s market, which you can gain access to for free by signing up for Benzinga’s Weekly REIT Report.
Over the past five years, private market real estate investments have outperformed the publicly traded REIT market by about 50%. Check out Benzinga’s Real Estate Offering Screener to discover the latest passive real estate investments.
Check Out More on Real Estate from Benzinga