Analyst Ronald Kamdem of Morgan Stanley maintained a Sell rating on Paramount Group, retaining the price target of $5.50.
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Ronald Kamdem has given his Sell rating due to a combination of factors impacting Paramount Group’s financial outlook. Despite the company exceeding expectations with its core FFO and raising its guidance, there are concerns about leasing spreads and occupancy rates. The leasing spreads have shown a decline on a cash basis, and occupancy rates have decreased compared to the previous quarter, which could indicate potential challenges in maintaining revenue growth.
Additionally, while Paramount Group has made progress in leasing activity and disposed of non-core assets, the net leverage remains high. The company’s financial results, though better than anticipated, are offset by interest expenses and general administrative costs. These factors contribute to a cautious outlook, leading to the Sell rating as the company navigates these financial pressures.