Duke Realty rises after 1Q results as analysts upgrade stock

NEW YORK—Shares of real estate investment trust Duke Realty Corp. rose Friday, as two analysts upgraded the stock following the company's first-quarter report.

Late Wednesday, the Indianapolis-based REIT said funds from operations fell 4 percent in the quarter, to $89.2 million, or 58 cents per share, from $92.5 million, or 62 cents per share.

The real estate industry uses funds from operations, or FFO, to measure operating performance. The measurement includes net income, but adds depreciation and amortization expenses, among other items and is considered a better gauge of REIT strength.

Duke's net income dropped to $4.3 million, or 3 cents per share, from $73.9 million, or 49 cents per share. Its revenue grew 8 percent, to $242.7 million from $224.5 million a year ago.

The company said 92.9 percent of its available space was leased during the quarter, down from 94.9 percent in the fourth quarter.

Analyst Lou Taylor of Deutsche Bank and Wachovia analyst Christopher Haley both upgraded the stock to the equivalent of "Buy" from "Hold" Friday, saying Duke shares are trading at a substantial discount to peers.

Taylor said the first quarter results were a bit below expectations, but the company "has no financing issues this year." He raised his price target to $30 from $28.

Duke stock gained 94 cents, or 3.8 percent, to $25.60.