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On Thursday, Citizens JMP analysts maintained a positive outlook on Arbor Realty Trust (NYSE:ABR), reiterating a Market Outperform rating and a price target of $13.50. This target aligns with InvestingPro’s analysis, which indicates the stock is currently undervalued, trading at an attractive P/E ratio of 9.4x. Following a thorough analysis of Arbor Realty Trust’s first-quarter results for 2025, the review of the filed Form 10-Q, and updates to their working model, the firm expressed confidence in the company’s stock.
Arbor Realty Trust has reportedly taken a more proactive approach in managing loan workouts and resolutions, a strategy expected to temporarily impact earnings as the real estate owned (REO) inventory rises. The company maintains strong financial health with a current ratio of 2.54, indicating ample liquidity to manage its operations. Despite this, the company has been actively investing capital in various business lines, with the core bridge loan portfolio experiencing net growth in the first quarter of 2025. This marks the first increase in the loan portfolio since the second quarter of 2022. InvestingPro subscribers can access detailed financial health metrics and 12 additional expert insights about ABR’s performance.
The reaffirmed $13.50 price target is based on an 8.9% required yield, calculated from projected total dividends of $1.20 for the year 2025. Citizens JMP has chosen not to apply a sum-of-the-parts valuation at this time. Their Distributable EPS estimate for 2025 aligns with the current dividend rate, suggesting that the dividend could be sustainable.
Furthermore, analysts at Citizens JMP believe that Arbor Realty Trust’s established Agency multifamily origination and servicing business adds significant platform value to the company. Should the price target and dividend projections be met, investors could potentially enjoy a total return of approximately 50% over the next 12 months, which includes a current cash yield of 12.3%. This projection reflects the analysts’ optimism about the future performance of Arbor Realty Trust’s stock.
In other recent news, Arbor Realty Trust reported its first quarter earnings, which fell short of analyst expectations. The company posted adjusted earnings per share of $0.16, missing the consensus estimate of $0.29. However, revenue exceeded expectations, coming in at $134.16 million, though it marked a 14.6% decline from the previous year. Despite the earnings miss, Arbor Realty Trust declared a quarterly cash dividend of $0.30 per common share. The company also highlighted its strategic move to secure a new $1.15 billion repurchase facility to enhance its leverage and liquidity.
In other developments, Keefe, Bruyette & Woods adjusted its price target for Arbor Realty Trust to $11.00 from $11.75, maintaining a Market Perform rating. The adjustment reflects a slight decrease in earnings projections due to increased real estate owned expenses and a decline in loan originations. Additionally, Arbor Realty Trust’s stockholders elected four Class I directors and ratified Ernst & Young LLP as the independent auditor for the 2025 fiscal year. These decisions were made during the company’s recent annual stockholders’ meeting.
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