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Raymond James analysts see opportunity in Parkway

Shares of Parkway Properties slide, but Raymond James analysts see buying opportunity

Associated Press

LOS ANGELES (AP) -- Shares in Parkway Properties Inc. were trading lower Tuesday afternoon, even as analysts with Raymond James & Associates raised their rating on the real estate investment trust's stock, saying its price represents an attractive entry point for investors.

THE SPARK: In a research note Tuesday, Raymond James analysts William Crow and Paul Puryear increased their rating on Parkway Properties to "Outperform" from "Market Perform." The analysts attributed the upgrade to an improving market for office properties and a recent pullback in Parkway's shares.

THE BIG PICTURE: Parkway Properties, based in Orlando, Fla., is a real estate investment trust that owns office properties and provides commercial real estate management and other services. The company owned an interest in 45 office properties in eight states, as of April 1.

THE ANALYSIS: The analysts noted that Parkway's shares have fallen 11 percent since May 21, a decline that has created an attractive window for investors to buy into the REIT.

The pullback in Parkway shares reflects a growing expectation that the Federal Reserve will taper off its program to stimulate the economy by pushing down interest rates through billions in monthly bond purchases. That would have the effect of driving interest rates higher.

While the market for office properties has been modest, the Raymond James analysts believe that Parkway's current stock price and upside potential as the economy picks up, provides "an intriguing investment opportunity."

The analysts see other potential catalysts driving Parkway's shares higher, including the possibility that the REIT will expand its property portfolio and improving job growth, which would support a better outlook for the office property sector overall.

SHARE ACTION: The stock slid 67 cents, or 3.9 percent, to $16.54 in afternoon trading as the broader markets declined. Shares are still up about 18 percent this year.

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