On Friday, JMP Securities reiterated its Market Outperform rating for Bright Spire (NYSE:SR) Capital (NYSE:BRSP) with a price target of $7.50. The firm's analyst highlighted the company's ongoing efforts to address its problematic assets and expressed a positive outlook on its potential returns. With a market capitalization of $722 million and an overall Financial Health score of "Fair" according to InvestingPro, the company shows mixed signals in its recovery efforts.
Bright Spire Capital, an internally-managed real estate investment trust, has been actively working through its problem assets, according to JMP Securities. The management team is expected to resolve a significant portion of these assets, which represent 60% of their watch list, in the upcoming quarters. This progress is seen as a driving factor for the analyst's optimistic rating.
The reaffirmed price target of $7.50 is based on 0.82 times the undepreciated book value of the company's shares. This target suggests a near-term total return potential of approximately 46% from the last closing price of $5.57, which includes a 34.6% price appreciation and an 11.5% cash yield over the next 12 months. This yield projection takes into account the recently reduced quarterly dividend of $0.16 per share. Notably, the stock shows significant volatility with a beta of 1.94, while maintaining strong liquidity with a current ratio of 7.72.
Bright Spire Capital is scheduled to report its fourth-quarter earnings on February 18, 2025. Following the earnings release, management will conduct the quarterly earnings call on February 19, 2025, at 10:00 a.m. ET. Interested parties can join the call by dialing 877-300-8521, with no passcode required.
Investors and analysts alike will be looking to the earnings report and subsequent call for further insights into the company's financial health and strategic initiatives moving forward.
In other recent news, BrightSpire Capital, a commercial real estate credit REIT, has announced a series of developments. The company has declared a quarterly dividend of $0.16 per share for Class A common stock, payable in 2025, continuing its trend of raising dividends for three consecutive years. BrightSpire also posted robust Q3 results for 2024, with a GAAP net income of $12.7 million and adjusted distributable earnings of $27 million.
In addition to these financial highlights, BrightSpire successfully completed a $675 million collateralized loan obligation transaction and initiated a share repurchase due to the stock trading at a significant discount. The company's liquidity remains strong at $416 million, with $251 million in unrestricted cash. BrightSpire has also decided to delay the sale of its Phoenix multifamily asset and projects portfolio and expects earnings growth.
Analysts from Jones Trading have upgraded BrightSpire's rating from Hold to Buy, setting a new stock target price at $7.25, citing the stock as undervalued at its current price. BrightSpire plans to increase its portfolio size by approximately $1 billion by the end of 2025. These are among the recent developments for BrightSpire, as it continues to manage a diversified portfolio in the commercial real estate debt sector.
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