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October 25, 2007
Analyst lowers rating on Forest City, cites "difficult financing market"
Atlantic Yards Report
Everytime someone representing the Atlantic Yards development company, Forest City Ratner, squawks about the project, it gets Norman Oder thinking; this time, it's about market conditions that are beyond the development company's control:
Let's put that Wall Street Journal interview yesterday with Joanne Minieri, new president of Forest City Ratner, the New York division of Forest City Enterprises (FCE), in a little more context--one in which an investment analyst, long bullish on the company, has put up a yellow "caution" sign. That also hints at potential delays in the Atlantic Yards project.
Minieri told the Journal: The availability of capital to do these terrific developments and stimulate the economy concerns me... Liquidity and the availability of funds is always something I try not to lose too much sleep over, but it can keep me up at night. Value creation is impacted tremendously when you have to pay more for financing proceeds.
(Two-year stock chart from Yahoo Finance.)
On 9/14/07, RBC Capital Markets analyst Rich Moore, who follows Forest City Enterprises, issued a ratings revision, nudging FCE down from "outperform"--meaning better than its peers in the real estate sector--to the middle ranking of "sector perform." In doing so, RBC rather dramatically cut its Forest City price estimate fom $80 to $54. (The current price is about $56.)
Posted by lumi at October 25, 2007 9:55 AM