Vornado Realty Trust (VNO) heads into its upcoming second quarter 2026 earnings release with investor attention on expected year over year gains in revenue and funds from operations per share, alongside improving signals from the U.S. office market.

At a share price of $40.06, Vornado Realty Trust has seen a 36.49% 90 day share price return and an 86.80% three year total shareholder return, which points to building momentum ahead of the earnings release.

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The recent surge in Vornado Realty Trust could be read as a vote of confidence in its New York focused portfolio and upcoming lease changes, or as a sentiment swing toward offices. How does that stack up against today’s valuation?

Most Popular Narrative: 11% Overvalued

The most followed narrative for Vornado Realty Trust implies a fair value of $36.08 compared with the current $40.06 share price, which sets up a clear valuation gap for investors to weigh.

The current valuation likely anticipates continued robust rent growth in Manhattan's premium office segment, as pent-up demand, low vacancy in Class A properties, and severely constrained new supply are forecasted to create a landlord's market. This is expected to drive a significant step-up in revenues and same-store NOI as new leases and lease roll-ups take effect in coming years.

Want to understand why a landlord friendly rent outlook still ends with very slim margins and an extremely high earnings multiple baked in? The narrative leans on steady revenue growth, shrinking profitability and a long dated earnings target that has to justify a hefty valuation bridge.

Result: Fair Value of $36.08 (OVERVALUED)

However, there are still risks that could reverse this Vornado Realty Trust narrative if premium Manhattan leasing stalls or if remote and hybrid work reduces long-term tenant demand assumptions.

Another View On Vornado Realty Trust’s Valuation

The analyst narrative pegs Vornado Realty Trust around 11% above its $36.08 fair value, yet the stock trades on a P/E of 10.3x. That compares with 16x for the Global Office REITs industry, and a fair ratio of 11.6x that the market could move toward.

This cheaper P/E, both against peers and the fair ratio, suggests the current price already builds in some caution rather than blue sky optimism. The question for you is whether earnings quality and the sector outlook justify that discount, or if it is still not enough.

Next Steps

If the mixed signals around Vornado Realty Trust have you on the fence, now is a good time to look through the details yourself and decide how you feel about both the risk and reward angles. To see both sides in one place, review the 3 key rewards and 5 important warning signs.

Looking For More Investment Ideas Beyond Vornado Realty Trust?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.