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Tuesday, KKR Real Estate Finance Trust Inc . (NYSE:KREF) maintained its Market Outperform rating and a $12.00 price target from Citizens JMP, following a thorough analysis of the company’s first-quarter results and financial statements. According to InvestingPro analysis, KREF is currently trading below its Fair Value, with strong financial metrics including a healthy current ratio of 12.72. The firm’s analysts highlighted KKR Real Estate Finance Trust’s strategic shift towards growth, noting that the company has recorded the highest level of new loan originations since the fourth quarter of 2022.
The analysts at Citizens JMP expressed confidence in the company’s direction, emphasizing the management’s efforts to address non-performing loans while proactively engaging in new loan originations. They affirmed their $12.00 price target, which is pegged at 0.83 times the current book value, and is based on an 8.3% required yield on the projected total dividends for 2025. The company has demonstrated strong revenue growth of 93% in the last twelve months.
The price target reflects a comprehensive evaluation that includes the company’s reported March 31 book value of $14.44. Citizens JMP’s target suggests that KKR Real Estate Finance Trust’s stock could potentially deliver a total return of approximately 39%. This projection comprises an estimated 28.3% in price appreciation and a cash dividend yield of 10.7%. InvestingPro data shows the company has maintained dividend payments for 9 consecutive years, demonstrating consistent shareholder returns. Get access to 8 more exclusive InvestingPro Tips and comprehensive analysis with a subscription.
The analysts’ positive stance on KKR Real Estate Finance Trust is supported by the company’s financial performance and strategic initiatives. Their report indicates that if the price target is achieved, investors could see significant gains from both the appreciation in stock price and the attractive dividend yield offered by the company. The stock’s PEG ratio of 0.42 suggests it’s trading at an attractive valuation relative to its growth prospects.
In other recent news, KKR Real Estate Finance Trust Inc (KREF) reported its first-quarter 2025 financial results, which showed a decline in both earnings per share (EPS) and revenue compared to analysts’ expectations. The company posted an EPS of $0.25, falling short of the forecasted $0.29, while revenue reached $31.3 million, missing the expected $38.57 million. KREF also reported a net loss of $10.6 million for the quarter. Additionally, the company is expanding its focus on the European lending market, aiming to grow its portfolio in Western Europe and the UK. KREF recently closed four loans totaling $376 million, primarily secured by Class A multifamily properties. Despite the earnings miss, KREF maintains a book value per share of $14.44 and declared a dividend of $0.25 per share. The company is also addressing concerns in the life sciences sector, where cyclical challenges have been noted. Looking ahead, KREF plans to diversify further into the European and CMBS markets, with an expectation of repayments exceeding $1 billion in 2025.
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