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SL Green (SLG) Surges 9.8%: Is This an Indication of Further Gains?

SL Green SLG shares rallied 9.8% in the last trading session to close at $22.65. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 39.4% loss over the past four weeks.

Despite a choppy environment in the office real estate market, tenant demand for premier office spaces remains healthy.

Amid this, SLG recently signed a long-term lease covering an entire tower floor at its One Madison Avenue with Palo Alto Networks, a leader in global cybersecurity, reflecting decent demand for its high-quality and well-amenetized office properties.

With this lease, SL Green’s signed office leasing volume for 2023 totaled 491,913 square feet. Moreover, the company’s office leasing pipeline increased to more than 1 million square feet from 700,000 square feet within just three weeks, likely driving investors’ confidence in the stock up.

This commercial real estate investment trust is expected to post quarterly funds from operations (FFO) of $1.45 per share in its upcoming report, which represents a year-over-year change of -12.1%. Revenues are expected to be $171.04 million, up 25.3% from the year-ago quarter.

While FFO and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in FFO estimate revisions and near-term stock price movements.

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For SL Green, the consensus FFO per share estimate for the quarter has been revised 1.7% higher over the last 30 days to the current level. And a positive trend in FFO estimate revision usually translates into price appreciation. So, make sure to keep an eye on SLG going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

SL Green belongs to the Zacks REIT and Equity Trust - Other industry. Another stock from the same industry, Getty Realty GTY, closed the last trading session 1.1% higher at $35.58. Over the past month, GTY has returned 2.5%.

Getty Realty's consensus FFO per share estimate for the upcoming report has changed +3.6% over the past month to $0.52. Compared to the company's year-ago FFO per share, this represents no change. Getty Realty currently boasts a Zacks Rank of #2 (Buy).

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