Goldman Sachs Maintains Neutral Rating On Forest City Enterprises

Goldman Sachs is maintaining its Neutral rating and also its $18 price target on Forest City Enterprises (NYSE: FCE.A), despite continued progress from the company.

In the report, Goldman Sachs writes, “Forest City continues to monetize assets via joint ventures and the legacy development pipeline is expected to be reduced to just two assets or $1.1 billion (Ridge Hill and the Barclays Center) following the delivery of two apartment assets (8 Spruce and Foundry Lofts) mid-2011. However, legacy development yields remain muted as a result of the decline in commercial real estate rents from peak levels and we continue to believe that the company's growth profile may lag peers as Forest City works to reduce consolidated leverage and finance / begin new development projects (its traditional source of value creation). That being said, based on our 2011 estimate and the positive outlook for CRE fundamentals, we view valuation as reasonable.”

FCE.A closed at $18.37 yesterday.