SL Green: Operational Momentum, Balance Sheet Reshaping, and Undervalued Recovery Support Buy Rating

BMO Capital analyst John Kim has maintained their bullish stance on SLG stock, giving a Buy rating on January 14.

John Kim has given his Buy rating due to a combination of factors that highlight both operational progress and improving forward prospects for SL Green. He notes that the company delivered leasing volumes that met or exceeded internal targets, with strong fourth-quarter activity and full‑year leasing that compares favorably to management’s objectives for the coming year. Cash re‑leasing spreads turned meaningfully positive versus the prior quarter, pushing 2025 results into the company’s guided range and setting the stage for significantly stronger spread performance anticipated in 2026. Manhattan leased occupancy also moved higher sequentially, landing close to SL Green’s year‑end target and signaling gradual stabilization in the portfolio.

At the same time, Kim acknowledges that 2026 will be a transition year, with a sizable planned disposition program of roughly $2.5 billion intended to reshape the balance sheet while underlying same‑store occupancy and NOI are expected to improve. He recognizes that same‑store cash NOI is still under pressure relative to long‑term goals and that leverage remains elevated, but he views the trajectory as improving, aided by asset sales and better leasing fundamentals. Kim also factors in the likelihood of a dividend reduction, which he interprets as a prudent step to align the payout with cash flow and development commitments rather than a signal of weakening asset quality. Balancing these risks against the operational momentum and strategic actions, he concludes that the current share price undervalues SL Green’s recovery and long‑term earnings power, supporting his Buy recommendation.

In another report released on January 14, Scotiabank also maintained a Buy rating on the stock with a $61.00 price target.