SL Green Realty stock: 8% dividend yield, golden cross, a buy

By:
on Sep 9, 2023
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  • SL Green share price has surged by more than 123% from its YTD low.
  • Investors believe that the company’s existential risks are overblown.
  • It has formed a golden cross pattern on the daily chart.

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SL Green Realty (NYSE: SLG) stock price has staged a strong recovery even as concerns about the real estate sector continued. The shares surged to a high of $40.40, the highest level since February this year. They have soared by more than 123% from the lowest level this year, making it one of the best-performing REITs.

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Risks overblown?

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SL Green Realty is one of the biggest Real Estate Investment Trusts (REITs) in the United States. With a huge presence in New York City, it is also one of the most heavily-shorted companies in the country. 

It has a short interest of over 24% as investors worry about the company’s ability to repay its debts at a time when the sector is not doing well. Recent news show that vacancy rates in New York’s office buildings remain significantly high.

The most recent results showed that the company remains in a difficult pace despite higher interest rates and occupancy rates. Its loss per share came in at $5.63, much higher than the 70 cents it made a hear ago. Its net loss was over $305 million because of its writedown of 625 Madison Avenue.

Despite these challenges, the company signed 43 office leases during the quarter, a sign that the situation was stabilizing. For example, companies like EQT Partners, Robert Half International, and Philip Russotti made an earlier renewal of their leases.

The biggest reason why the SL Green Realty stock price has risen is that investors believe that the company will handle its 2024 maturities well. It has already started making some asset sales. It has also risen as investors anticipate that more companies will ask their employees to go back to work.

Still, there are concerns about the company’s business as noted by Fitch when it downgraded the stock. The company identified several important risks, including low unencumbered coverage and asset concentration.

SL Green stock price forecast

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The daily chart shows that the SL Green share price has been in a strong bullish trend in the past few months. Most recently, it managed to move above the important resistance point at $38, the highest point on July 31st. It is now approaching the key level at $41.55 (Feb 22 high).

The SLG stock has also jumped above the 38.2% Fibonacci Retracement level. Most importantly, the shares have formed a golden cross, which happens when the 200-day and 50-day EMAs make a crossover. 

Therefore, the stock will likely continue rising as buyers target the key resistance point at $50. The stop-loss of this trade will be at $38.

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