Last Update 17 Feb 26

Fair value Decreased 4.91%

VNO: Leasing Momentum And Share Buybacks Will Support A Rebound

Analysts have trimmed their average price target for Vornado Realty Trust by about $2 to roughly $38, reflecting slightly softer revenue growth assumptions, offset by higher expected profit margins and a lower assumed discount rate. Recent mixed target changes and a JPMorgan upgrade to Neutral frame a more balanced outlook on New York office leasing and rents.

Analyst Commentary

Recent Street research around Vornado Realty Trust highlights a split view, with some firms edging price targets higher and others trimming them. The common thread is that analysts see both appealing upside drivers and clear execution risks tied to New York office fundamentals and valuation.

Bullish Takeaways

JPMorgan's move to Neutral from Underweight signals that, at current levels, some downside risks are seen as better reflected in the share price, especially after the recent pullback.
Bullish analysts point to what they view as resilient fundamentals, including New York office leasing and rents, as support for maintaining or slightly raising price targets.
Comments around continued leasing at attractive rents suggest confidence that Vornado can execute on occupancy and pricing, which is important for cash flow and asset values.
A raised price target from at least one firm indicates that some models are baking in stronger profitability or a reduced perceived risk premium, even if the changes are incremental.

Bearish Takeaways

Multiple recent price target cuts highlight concerns about the pace and durability of revenue growth, especially given ongoing uncertainty in office demand.
Bearish analysts appear more cautious on how quickly leasing momentum can translate into higher earnings, which weighs on their valuation assumptions.
The cluster of modest target reductions suggests some investors may focus on execution risk around filling space and keeping rents at levels needed to justify higher targets.
With the average target only modestly above current trading levels, more cautious research commentary may keep expectations tempered until there is clearer evidence on leasing volumes and rent trends.

What's in the News

The company completed a share repurchase program announced on April 26, 2023, buying back a total of 4,376,421 shares for $108.86 million. This represents 2.28% of shares (Key Developments).
Between October 1, 2025 and February 9, 2026, Vornado repurchased 2,351,926 shares for $79.72 million. This accounts for 1.22% of shares as part of the completed buyback program (Key Developments).
Paramount Television Studios signed the first lease at Sunset Pier 94 Studios in Manhattan, taking 70,000 square feet for production of Dexter: Resurrection. The facility totals 232,000 square feet of stages, production support space and offices, and offers community amenities such as new waterfront open space and workforce programs (Key Developments).
The company acquired 3 East 54th Street for $141 million. The property is a demolition-ready asset on 18,400 square feet of land zoned for approximately 232,500 buildable square feet as of right. It is located between Fifth Avenue and Madison Avenue and is positioned alongside several existing Vornado holdings in the Plaza District and Park Avenue area (Key Developments).

Valuation Changes

Fair Value: updated estimate trimmed from $39.8 to about $37.85, a reduction of roughly 5%.
Discount Rate: adjusted slightly lower from 8.39% to about 8.22%, which suggests a modestly lower required return in the model.
Revenue Growth: assumption eased from 1.98% to about 1.83%, which indicates a slightly more cautious outlook on top line expansion.
Net Profit Margin: modelled margin increased from 1.28% to about 6.26%, a very large change that points to higher expected profitability on each $ of revenue.
Future P/E: projected P/E multiple moved from 387.0x to about 72.4x, a sharp reset that brings the valuation assumption closer to more typical equity ranges.

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Key Takeaways

Market confidence centers on Vornado's premium Manhattan assets, redevelopment projects, and anticipated demand for high-end, sustainable office spaces driving sustained revenue and rent growth.
Investors appear to discount risks from remote work, expecting tenant migration to quality and urban revitalization to provide durable pricing power and earnings visibility.
Strong demand for premium Manhattan assets, successful redevelopment, solid leasing momentum, prudent financial management, and key market focus position Vornado for sustainable growth and resilience.

Catalysts

About Vornado Realty Trust

Vornado Realty Trust (“Vornado”) is a fully-integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P.What are the underlying business or industry changes driving this perspective?

The current valuation likely anticipates continued robust rent growth in Manhattan's premium office segment, as pent-up demand, low vacancy in Class A properties, and severely constrained new supply are forecasted to create a landlord's market; this is expected to drive a significant step-up in revenues and same-store NOI as new leases and lease roll-ups take effect in coming years.
Investor optimism seems based on the expectation that the successful redevelopment of the Penn District-coupled with the ongoing migration of tenants towards modern, amenity-rich, mixed-use office spaces-will materially increase occupancy and allow Vornado to capture premium rental rates, substantially boosting both revenue and net income by 2027 and beyond.
The market may be assuming sustained urban revitalization and population growth trends in core Vornado markets (especially Manhattan), underpinning strong tenant demand and positioning the company's trophy assets to deliver durable pricing power and above-average cash flow growth, enhancing long-term earnings visibility.
Current valuations appear to reflect confidence that Vornado's focus on sustainability, energy efficiency upgrades, and LEED-certified buildings will not only meet evolving tenant and investor preferences but also support higher average occupancy and rental rates, with a positive impact on future net margins as green demand accelerates.
The positive outlook may also discount risks from remote and hybrid work adoption, presuming the ongoing flight-to-quality dynamic will favor Vornado's premier assets in gateway cities, thereby driving improved leasing momentum and reducing revenue volatility compared to lower-tier or more diversified peers.

Vornado Realty Trust Earnings and Revenue Growth

Vornado Realty Trust Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Vornado Realty Trust's revenue will grow by 3.0% annually over the next 3 years.
Analysts assume that profit margins will shrink from 43.0% today to 1.1% in 3 years time.
Analysts expect earnings to reach $21.9 million (and earnings per share of $0.32) by about September 2028, down from $812.7 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $69 million in earnings, and the most bearish expecting $-245.4 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 470.4x on those 2028 earnings, up from 9.4x today. This future PE is greater than the current PE for the US Office REITs industry at 37.8x.
Analysts expect the number of shares outstanding to grow by 0.73% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.43%, as per the Simply Wall St company report.

Vornado Realty Trust Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Sustained flight-to-quality trends and unprecedented tenant demand for top-tier, amenity-rich Class A space in prime Manhattan locations-combined with limited new office supply-create powerful pricing power for Vornado, positioning its trophy assets for strong rent growth and higher occupancy, which could drive notable increases in revenue and NOI.
Strategic redevelopment of the Penn District and adjacent mixed-use, live-work-play enhancements (including new residential units and revitalized retail frontage) are already exceeding initial underwriting expectations, enabling value creation and long-term NOI expansion as rents rise from current $100/foot levels toward $150/foot, which could fuel substantial EPS growth over the next several years.
Robust leasing momentum and a strengthening pipeline-demonstrated by significant multi-year leases with high-credit tenants (e.g., NYU, Verizon, Samsung)-suggest improving occupancy rates well over 90% by 2027, while upward mark-to-market rents and reduced concessions/free rent support higher margins and stable cash flow for shareholder returns.
Prudent balance sheet management, including net debt reduction, improved fixed charge coverage, and disciplined capital recycling (selective asset sales and reinvestment), increases financial flexibility, reduces interest expense, and protects net margins-mitigating downside risk in volatile markets and making higher dividends more sustainable over time.
Urbanization and economic revitalization trends in core markets such as Manhattan and the recovering San Francisco CBD, coupled with Vornado's focus on iconic, well-located assets, position the company to outperform weaker peers; this supports resilient long-term rental growth, elevated operating margins, and asset value appreciation, potentially enhancing overall earnings and share price.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $37.857 for Vornado Realty Trust based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $46.0, and the most bearish reporting a price target of just $30.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.1 billion, earnings will come to $21.9 million, and it would be trading on a PE ratio of 470.4x, assuming you use a discount rate of 8.4%.
Given the current share price of $39.9, the analyst price target of $37.86 is 5.4% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Improved Office Leasing Will Drive Future Recovery Despite Premium Risks