We have updated our research report on Mack-Cali Realty Corporation CLI on Dec 10, 2015.
After suffering its share of struggles in the recent years, in September, Mack-Cali decided to focus on waterfront and transit-oriented office properties as well as luxury multi-family properties, instead of continuing as a suburban company. (Read: Mack-Cali to Find Its Fortunes on the Hudson Waterfront)
The aim in doing so was to attract people who prefer to live, work and play in the same area – a trend that drove development in several other cities of the U.S. This group also gives importance to transit options. So, focusing on such areas became a strategic choice for the company.
Then in November, in sync with its strategy to focus on transit-based real estate and waterfront properties, Mack-Cali announced the acquisition of 333 Thornall Street in Edison, NJ for around $53.1 million.
Going forward, we believe that such strategic measures would enable Mack-Cali to ride on the growth trajectory for a long time. With several Fortune 500 companies having their headquarters in New Jersey, and others enjoying a notable presence in the region on the back of a skilled workforce and a well-established transit network, it is now a priority for the company to expand its business in this region.
Besides, in late October, Mack-Cali announced encouraging third-quarter 2015 results. It posted an earnings surprise of 15.91% in the quarter. If fact, the company exceeded estimates in all four trailing quarters with an average beat of 8.06%.
Moreover, analysts have been bullish on the firm’s prospects in both the short and long term as Mack-Cali has seen solid earnings estimate revision activity in the recent months.
Over the past 2 months, current quarter estimates have risen from 45 cents to 46 cents per share, while current year estimates have risen from $1.77 to $1.85 per share. Also, for 2016, estimates moved from $1.79 per share to $2.00. This has helped CLI to earn a Zacks Rank #1 (Strong Buy), further underscoring the company’s solid position.
Other Stocks to Consider
Investors interested in the REIT industry may consider other stocks like Cousins Properties Incorporated CUZ, Highwoods Properties Inc. HIW and Public Storage PSA. All these stocks carry a Zacks Rank #2 (Buy).
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