Veris Residential (VRE, Financial) reported a slight increase in first-quarter revenue, climbing to $67.76 million from $67.34 million during the same period last year. The company has been focusing on strengthening its operational performance while executing its strategic corporate plan introduced earlier this year.
Part of this strategy includes divesting non-core assets, with Veris successfully closing or entering binding contracts for the sale of properties worth a total of $79 million. This move aims to unlock hidden value within the company despite challenging market conditions.
Furthermore, Veris has taken steps to simplify its portfolio. The company has consolidated its interest in the Jersey City Urby, now rebranded as Sable, and has assumed management responsibilities for the property. By leveraging its platform, Veris anticipates that Sable will achieve more than $1 million in annualized synergies on a run-rate basis.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Veris Residential Inc (VRE, Financial) is $19.79 with a high estimate of $26.00 and a low estimate of $17.00. The average target implies an upside of 23.08% from the current price of $16.08. More detailed estimate data can be found on the Veris Residential Inc (VRE) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, Veris Residential Inc's (VRE, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Veris Residential Inc (VRE, Financial) in one year is $19.47, suggesting a upside of 21.08% from the current price of $16.08. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Veris Residential Inc (VRE) Summary page.
Key Business Developments
Release Date: February 25, 2025
- NOI Growth: 6.9% for the full year 2024.
- Blended Net Rental Growth: 4% for the full year 2024.
- Core FFO Increase: 13% compared to 2023.
- Dividend Increase: Approximately 60% year over year.
- Refinanced Mortgages: Over $526 million in 2024.
- Debt Reduction: Reduced indebtedness by over $180 million.
- Occupancy Rate: 94.6% excluding Liberty Towers; 93.9% including Liberty Towers.
- Average Rent Per Home: Above $4,000, a 4.6% year-over-year increase.
- Net Loss Per Share: $0.25 for the full year 2024.
- Core FFO Per Share: $0.60 for the full year 2024.
- Same-Store NOI Growth: 7.3% for the fourth quarter 2024.
- Revenue Growth: 5.4% for the full year 2024.
- Expense Growth: 2.5% year over year.
- Net Debt to EBITDA: 11.7 times on a trailing 12-month basis.
- Liquidity: $158 million as of February 21, 2025.
- 2025 Core FFO Guidance: $0.61 to $0.63 per share.
- 2025 Same-Store NOI Growth Projection: 1.7% to 2.7%.
- 2025 Revenue Growth Projection: 2.1% to 2.7%.
- 2025 Expense Growth Projection: 2.6% to 3%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Veris Residential Inc (VRE, Financial) successfully pivoted away from office exposure, executing large-scale asset sales at advantageous pricing.
- The company delivered NOI growth of 6.9% and blended net rental growth of 4% for the full year 2024.
- Veris Residential Inc (VRE) raised its dividend by approximately 60% year over year.
- The company refinanced over $526 million of mortgages, reducing indebtedness by over $180 million.
- Veris Residential Inc (VRE) plans to use proceeds from asset sales to buy back up to $100 million of stock and pay down debt, reducing leverage below 9 times.
Negative Points
- The intrinsic value of Veris Residential Inc (VRE) is not accurately reflected in its current share price.
- Ongoing economic uncertainty and inflationary pressures are expected to result in a higher-for-longer rate environment, impacting the multifamily investment market.
- The company anticipates a slight decline in occupancy due to a return to ordinary seasonal trends.
- Veris Residential Inc (VRE) faces challenges in the investment market, with 2024 investment volumes 35% below the historical average.
- The company has no consolidated debt maturities until 2026, which may limit flexibility in financial planning.
