REIT has recently been under huge pressure partly due to the negative economic outlook, which I believe is justly been reported by the Main stream media, although may have been mildly overblown in WSJ. However, nonetheless, the Res RE is not looking up anytime soon despite rate cuts due to the tightened lending on top of decreasing housing prices, oversupply, etc. Commercial RE is just seeing the beginning of lowered mall sales and lowered occupancy due to the effects of lowered consumer spending. So much more downside available. EPS at $1.2 and paying $2 in dividend is not sustainable, and thus the dividend rate must be reduced or earnings has to catch up. Given the FPE in the 60's, I don't see earnings up, so the dividend cut is imminent. Low teens is more reasonable target for the PE and the $25 target in the next 3 months is a conservative measure.
$33.96 (02/21/08)
