Wells Fargo Downgrades Washington Real Estate Investment Trust (WRE) to Underperform; Limited Relative Value Upside Potential

Wells Fargo downgraded Washington Real Estate Investment Trust (NYSE: WRE) to Underperform with a price target range of $24-$25 (from $30-33).

Wells analyst says, "We like the portfolio repositioning WRE has accomplished during the past few years, but believe current valuation and modest lease-up potential vs. peers limits upside potential. We view our rating system as a relative to other stocks in coverage group, which in balance we feel have better near-term prospects. The negatives for WRE surround current valuation--100bp premium cap rate vs. peers (historical average is less than 70bps)--and limited near-term earnings growth potential, in our view. The positives for WRE surround its diversified property portfolio, which should limit downside risk, but based on our market tours during this fall we don't believe WRE peers are likely to see a slowdown in near-term leasing activity, and thus the 'safety-trade' to WRE appears overdone, in our view."

For more ratings news on Washington Real Estate Investment Trust click here and for the rating history of Washington Real Estate Investment Trust click here.

Shares of Washington Real Estate Investment Trust closed at $28.34 yesterday.

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