Barclays Lowers FFO Outlook and Price Target on Mack-Cali Realty (CLI); Low-Quality Q1 Beat with Challenging Outlook

May 14, 2012 3:23 PM EDT
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Price: $28.63 --0%

Rating Summary:
    5 Buy, 5 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 23 | Down: 31 | New: 34
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Barclays maintains an 'Equalweight' on Mack-Cali Realty (NYSE: CLI) price target lowered from $32 to $30.

Analyst, Ross L. Smotrich, said, "FFO of $0.74 was comfortably ahead of expectations (our estimate and the consensus were each $0.67), but was driven by a large lease termination fee from Toys 'R' Us (previously expected to vacate 242,500 sf at the end of 2012) and unsustainably low operating expenses aided by the mild winter."

Smotrich thinks that Jersey's City residential development may be a positive catalyst, but occupancy isn't expected until 2014-15. Therefore, FY12 FFO is lowered from $2.68 to $2.60 and FY13 cut from $2.65 to $2.55. All in, Smotrich sees discounted valuation and high dividend yield are offset by below average outlook.

For an analyst ratings summary and ratings history on Mack-Cali Realty click here. For more ratings news on Mack-Cali Realty click here.

Shares of Mack-Cali Realty closed at $28.94 yesterday.

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