Truist Securities has reduced its price target for SL Green Realty (NYSE: SLG) to $44.00 from $47.00 and retained a Hold rating on the real estate investment trust. The revised objective sits beneath InvestingPro's Fair Value estimate, suggesting the REIT may be trading below that assessment given its most recent market price of $42.16.
In its modeling, Truist analyst Michael R. Lewis slightly increased the firm's forecast for SL Green's 2026 FFO (funds from operations), while maintaining the 2027 FFO projection at a level that remains below consensus. This modeling adjustment aligns with InvestingPro data indicating analysts anticipate a sales decline for the company this year, even though net income is expected to rise.
Truist's note emphasized concern that SL Green's outlined plan to sell properties and refinance debt could reduce earnings per share if those transactions are dilutive - a possibility the firm sees even if management meets its stated objectives. The analyst identified the planned disposals and financing moves as potential drivers of dilution to reported earnings.
The brokerage also highlighted risks tied to lease economics. High concession packages and uncertainty around the trajectory of white-collar job growth were singled out as factors that could weigh on the REIT's operating performance and leasing outcomes.
At the same time, Truist acknowledged offsetting positives for SL Green. The firm pointed to strong leasing volume for high-quality office space and noted that there could be upside from leases that have been signed but are not yet producing rental income. Those elements provide some counterbalance to the concerns about concessions and macro labor trends.
Separately, SL Green Realty Corp. released fourth-quarter 2025 results that included an earnings-per-share figure below expectations. The company reported EPS of -1.49, missing the projected -0.55. Despite the shortfall on the EPS line, the company's share price rose following the announcement, indicating an investor response that appears to focus at least in part on the firm's strategic actions and operational improvements rather than the headline earnings miss.
The earnings release underscores the need for investors to weigh both immediate accounting outcomes and the broader strategic context management is pursuing. Given Truist's revised target and its commentary, market participants should consider the interplay between planned asset and financing moves, leasing performance in premium properties, and the broader employment trends that could affect office demand.
Overall, Truist's action narrows the gap between its near-term positive indicators for SL Green and the structural and execution risks the firm believes could constrain earnings growth.