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Paramount Group (PGRE)
:PGRE
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Paramount Group
(NYSE:PGRE)
Rating:66Neutral
Price Target:
$6.50
▲(1.40% Upside)
Positive Factors
Leasing Guidance
The company raised their leasing guidance to 1.3 million square feet for the year compared to 1 million square feet at the midpoint prior.
Strategic Alternatives
The company's willingness to unlock value through strategic alternatives, which could include a potential sale of assets or the company, may be viewed as positive.
Negative Factors
Lease Expirations
JPMorgan Chase is only renewing about 10% of the 219,000 square feet that expires, which suggests the building's leased rate may drop from 72.3% to approximately 42% all else equal.
Management Changes
Management changes seem to be a result of recently reported undisclosed payments.
Strategic Review Risks
The strategic review process carries high execution risk.
Paramount Group (PGRE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.53B
Dividend Yield0.56%
Average Volume (3M)2.79M
Price to Earnings (P/E)―
Beta (1Y)0.88
Revenue Growth-1.68%
EPS Growth63.27%
CountryUS
Employees316
SectorReal Estate
Sector Strength55
IndustryREIT - Office
Share Statistics
EPS (TTM)-0.09
Shares Outstanding220,392,030
10 Day Avg. Volume2,390,431
30 Day Avg. Volume2,793,773
Financial Highlights & Ratios
PEG Ratio0.28
Price to Book (P/B)0.34
Price to Sales (P/S)1.42
P/FCF Ratio4.05
Enterprise Value/Market Cap3.57
Enterprise Value/Revenue7.31
Enterprise Value/Gross Profit12.53
Enterprise Value/Ebitda17.08
Forecast
1Y Price Target
$6.10Price Target Upside-4.84% Downside
Rating ConsensusHold
Number of Analyst Covering5
Paramount Group Business Overview & Revenue Model
Company DescriptionParamount Group, Inc. (PGRE) is a real estate investment trust (REIT) that specializes in owning, operating, and managing high-quality office properties in major urban markets, primarily in New York City and Washington, D.C. The company focuses on acquiring and developing properties that meet the evolving needs of tenants in a dynamic economic environment, providing a range of leasing and property management services to its clients.
How the Company Makes MoneyParamount Group generates revenue primarily through leasing office space to a diverse tenant base, which includes both government and private sector entities. The company's revenue model is predominantly based on long-term leases, where it earns rental income from tenants. Additionally, PGRE may benefit from ancillary income sources, including property management fees and service charges. The firm also engages in property development and redevelopment, which can lead to increased asset value and rental income potential. Strategic partnerships with other real estate developers and investment firms can further enhance its earnings through joint ventures and co-investments in lucrative real estate projects.
Paramount Group Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: 6.30%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with several key achievements, including exceeding core FFO expectations, strong leasing activity, and balanced market performance. The company showed financial stability and adaptability to market conditions, particularly in San Francisco, where positive trends are emerging. However, challenges remain in managing lease expirations in San Francisco and upcoming lease rolls in New York.Q2-2025 Updates
Positive Updates
Exceeding Core FFO Expectations
Core FFO of $0.17 per share exceeded consensus by $0.03, driven by robust leasing activity and operational discipline.
Strong Leasing Activity
Executed over 400,000 square feet of leases in the quarter, the highest quarterly total since 2019, bringing the year-to-date total to approximately 690,000 square feet.
Balanced Market Performance
Leasing was well balanced across New York (52%) and San Francisco (48%), highlighting strength in both markets.
Raising Full Year Guidance
Increased full-year guidance across all key metrics, including core FFO, leasing volume, cash NOI, and year-end leased occupancy.
High Occupancy in New York Portfolio
New York portfolio reached 88.1% leased, the highest level since early 2022, with significant tenant commitments in flagship assets.
Financial Stability
Ended the quarter with over $534 million of cash, providing flexibility and confidence to navigate the evolving macro environment.
Positive San Francisco Market Trends
Executed over 190,000 square feet of leasing in San Francisco with signs of stabilization and renewed interest from AI, legal, and professional services sectors.
Negative Updates
Lease Expiration Impact in San Francisco
Same-store lease occupancy rate at share was 85.4%, down 80 basis points due to the scheduled lease expiration of Google at One Market Plaza.
Near-Term Challenges in San Francisco
San Francisco's occupancy remains challenged with a notable lease expiration profile, impacting near-term softness despite signs of recovery.
Upcoming Lease Roll in New York
Significant lease expirations expected in 1633 Broadway in New York in 2025 and 2026, requiring proactive leasing strategy.
Elevated Concessions in San Francisco
Concessions were elevated in San Francisco to secure long-term deals with high-quality tenants.
Company Guidance
During Paramount Group's second quarter 2025 earnings call, the company provided optimistic guidance, raising full year expectations across key metrics due to strong performance. They reported core FFO of $0.17 per share, exceeding consensus by $0.03, driven by significant leasing activity with 405,000 square feet executed in the quarter, marking the highest quarterly total since 2019. This leasing was balanced between New York (52%) and San Francisco (48%), with New York occupancy reaching 88.1% and San Francisco showing signs of stabilization despite challenges. Paramount increased their full-year leasing volume guidance to 1.3 million square feet and raised core FFO guidance to a range of $0.55 to $0.59 per share. Additionally, they reported a robust leasing pipeline and strong liquidity with over $534 million in cash, positioning them well for opportunistic capital allocation.Paramount Group Financial Statement Overview
Summary
Paramount Group exhibits stable revenue and robust cash flows, but consistent net losses and rising net debt are concerning. The balance sheet remains solid, indicating financial stability, but profitability needs improvement.Income Statement
The company exhibits stable revenue with a slight decline in TTM figures compared to the previous annual report. Gross and EBIT margins are reasonable, but the consistent net losses present a profitability challenge. Revenue growth is modest, indicating a need for strategic improvements.65
Positive
Balance Sheet
The balance sheet shows a healthy equity base and a manageable debt-to-equity ratio of approximately 1.19, signaling stability. The equity ratio remains strong, but the increasing net debt warrants caution. ROE is negative due to net losses, highlighting a need to improve profitability.68
Positive
Cash Flow
Cash flows are robust, with positive operating and free cash flows. The operating cash flow to net income ratio is strong, indicating efficient cash generation despite net losses. However, growth in free cash flow is declining, suggesting potential future cash flow constraints.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 745.23M | 757.45M | 742.79M | 740.38M | 726.79M | 714.24M |
| Gross Profit | 434.86M | 454.17M | 198.18M | 462.95M | 461.35M | 446.65M |
| EBITDA | 319.15M | 359.91M | 27.54M | 354.15M | 381.12M | 356.85M |
| Net Income | -78.14M | -46.29M | -259.74M | -28.20M | 2.06M | -14.12M |
Balance Sheet | ||||||
| Total Assets | 7.96B | 7.87B | 8.01B | 8.45B | 8.49B | 8.55B |
| Cash, Cash Equivalents and Short-Term Investments | 659.57M | 375.06M | 428.21M | 408.90M | 524.90M | 434.53M |
| Total Debt | 3.70B | 3.68B | 3.80B | 3.84B | 3.84B | 3.80B |
| Total Liabilities | 3.86B | 3.86B | 3.99B | 4.04B | 4.04B | 4.04B |
| Stockholders Equity | 3.03B | 3.14B | 3.20B | 3.59B | 3.59B | 3.65B |
Cash Flow | ||||||
| Free Cash Flow | 136.94M | 264.93M | 277.86M | 120.83M | 132.31M | 237.01M |
| Operating Cash Flow | 136.94M | 264.93M | 277.86M | 246.64M | 244.31M | 237.27M |
| Investing Cash Flow | -78.03M | -109.11M | -113.09M | -152.58M | -103.48M | 40.03M |
| Financing Cash Flow | 82.99M | -109.97M | -57.98M | -173.90M | -76.48M | -143.47M |
Paramount Group Technical Analysis
Positive
6.41
Price Trends
6.32
Positive
5.43
Positive
5.09
Positive
Market Momentum
0.03
Negative
54.04
Neutral
84.82
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PGRE, the sentiment is Positive. The current price of 6.41 is above the 20-day moving average (MA) of 6.38, above the 50-day MA of 6.32, and above the 200-day MA of 5.09, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 54.04 is Neutral, neither overbought nor oversold. The STOCH value of 84.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PGRE.
Paramount Group Risk Analysis
Paramount Group disclosed 55 risk factors in its most recent earnings report. Paramount Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Paramount Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $3.10B | 24.50 | 5.39% | 6.97% | -2.16% | -16.41% | |
67 Neutral | $1.00B | 56.09 | 1.28% | 9.24% | 8.18% | -15.35% | |
66 Neutral | $1.53B | ― | -2.52% | 0.56% | -1.68% | 63.27% | |
64 Neutral | C$1.99B | 4.76 | -0.88% | 5.24% | 2.53% | -62.52% | |
59 Neutral | $2.93B | 66.68 | 1.74% | 5.27% | -0.57% | ― | |
58 Neutral | $4.06B | 663.10 | -0.37% | 5.73% | 15.25% | 79.18% | |
57 Neutral | $940.01M | ― | -4.27% | 6.62% | -6.74% | 17.44% |
* Real Estate Sector Average
Performance Comparison
PGRE
Paramount Group
6.41
1.83
39.96%
DEI
Douglas Emmett
14.43
0.58
4.19%
HIW
Highwoods Properties
28.69
0.33
1.16%
SLG
SL Green Realty
53.41
-4.50
-7.77%
PDM
Piedmont Office
7.55
-0.59
-7.25%
DEA
Easterly Government Properties
22.07
-8.97
-28.90%
Paramount Group Corporate Events
Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Paramount Group Announces Strategic Review and Leadership Changes
Neutral
May 19, 2025
On May 15, 2025, Paramount Group held its annual meeting of stockholders, where key decisions were made, including the election of board members and approval of executive compensation. The company also announced a strategic review to maximize shareholder value, engaging BofA Securities and Latham & Watkins LLP as advisors. Additionally, Paramount appointed Ermelinda Berberi as Executive Vice President, Chief Financial Officer, and Treasurer, and Timothy Dembo as Senior Vice President, General Counsel, and Secretary, marking a significant management transition.
The most recent analyst rating on (PGRE) stock is a Sell with a $3.50 price target. To see the full list of analyst forecasts on Paramount Group stock, see the PGRE Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.