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On Wednesday, Citizens JMP analyst Steven DeLaney increased the price target for Franklin BSP Realty Trust (NYSE:FBRT) shares to $15.00, up from the previous target of $14.50, while reiterating a Market Outperform rating on the stock. According to InvestingPro data, the company maintains a "Fair" overall financial health score, with particularly strong momentum metrics. The stock appears slightly undervalued based on InvestingPro’s Fair Value analysis. DeLaney highlighted the company’s strong performance, attributed to its focus on multifamily credit assets, and its strategic move to introduce a new business line, which is anticipated to establish FBRT as a prominent multi-channel commercial mortgage real estate investment trust (CMREIT).
The new $15.00 price target implies a 13.1% upside from the current trading price and is anchored on a 9.5% required dividend yield applied to the analyst’s 2025 dividend estimate of $1.42 per share. Currently, FBRT offers an attractive dividend yield of 10.71%, making it one of the significant dividend-paying stocks tracked by InvestingPro. This valuation also corresponds to a fully converted price-to-book value (P/BV) multiple of 0.95 times, suggesting a potential near-term total return opportunity of approximately 24%.
Franklin BSP Realty Trust reported its fourth-quarter financial results on February 13, 2025, posting GAAP earnings per share (EPS) of $0.29 and distributable EPS of $0.30. The company maintains a healthy gross profit margin of 94.75% and has demonstrated profitability over the last twelve months, with analysts predicting continued profitability for the current year. However, these earnings fell short of covering the quarterly dividend of $0.355 per share. The distributable return on equity (ROE) for the quarter stood at 7.8%, marking an improvement from the negative 2.6% recorded in the third quarter of the previous year. The company’s fully converted and undepreciated book value per share was slightly reduced to $15.19, down from $15.24 as of September 30.
During the fourth quarter, Franklin BSP Realty Trust did not engage in any sales of conduit loans into commercial mortgage-backed securities (CMBS) securitizations. This decision reflects the company’s operational strategies and financial activities during the period. For a comprehensive analysis of FBRT’s financial health, valuation metrics, and growth potential, investors can access the detailed Pro Research Report available exclusively on InvestingPro, which covers over 1,400 US stocks with expert insights and actionable intelligence.
In other recent news, Franklin BSP Realty Trust has been the focus of several significant developments. Raymond (NSE:RYMD) James has maintained its Strong Buy rating for the company, with a price target of $15.50, following a detailed analysis of the company’s fourth-quarter results. The analyst from Raymond James expects an increase in earnings throughout 2025, driven by new investments and portfolio leverage, especially as capital from real estate owned properties is reinvested. In addition, B.Riley has reaffirmed a Buy rating with a price target of $15.00, anticipating that the company’s upcoming fourth-quarter 2024 results will exceed consensus expectations. The firm highlights the company’s robust origination activity and its ability to cover its quarterly dividend, despite challenges in the commercial mortgage REIT sector due to high-interest rates.
Moreover, Franklin BSP Realty Trust has amended the rights of its Series H Convertible Preferred Stock holders, extending the mandatory conversion date to January 21, 2026. This extension provides the sole holder with increased flexibility in conversion options. The amendment was mutually agreed upon by the company’s board and the preferred stockholder, reflecting a shared interest in extending the conversion period. These developments are intended to keep investors informed of corporate actions that could influence investment decisions.
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