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On Thursday, JMP analysts, led by Steven DeLaney, maintained their Market Outperform rating and $7.50 price target for Bright Spire (NYSE:SR) Capital (NYSE:BRSP) shares, currently trading at $6.10 with a market capitalization of $789 million. According to InvestingPro data, the stock is trading slightly above its Fair Value. The reaffirmation came after Bright Spire Capital reported its fourth-quarter financial results on February 18, which included a GAAP loss of $0.16 per share and an adjusted distributable earnings per share (EPS) of $0.18. This adjusted EPS met both the consensus and JMP’s estimate.
The company’s quarterly dividend of $0.16 per share was fully covered by the adjusted distributable EPS, with a coverage ratio of 113%. Currently offering an attractive dividend yield of 10.49%, Bright Spire Capital is among the companies that InvestingPro identifies as paying significant dividends to shareholders. Despite the loss, Bright Spire Capital managed to match expectations on an adjusted basis, which excludes certain items that the company doesn’t consider indicative of its core operating performance.
Bright Spire Capital’s increase in CECL (Current Expected Credit Loss) reserves by $20.5 million, or $0.16 per share, was noted as a strategic move to facilitate the resolution of problem assets. This increase in reserves is a reflection of the company’s cautious approach to asset management and its efforts to strengthen its financial position against potential credit losses. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 27.53, indicating robust short-term financial health. Get access to 6 more exclusive ProTips and comprehensive financial analysis in the Pro Research Report.
The undepreciated book value per share of Bright Spire Capital saw a slight decrease, moving down to $8.89 from $9.11 as of September 30. This decline was attributed primarily to the build-up of the CECL reserves. Despite the dip in book value, JMP’s analysts appear to remain optimistic about the company’s ability to perform, as reflected in their continued endorsement of the stock at a Market Outperform rating with a stable price target. While currently unprofitable, InvestingPro analysts expect the company to return to profitability this year, with projected earnings of $0.79 per share for FY2025.
In other recent news, BrightSpire Capital has announced a quarterly dividend of $0.16 per share for its Class A common stock, payable on January 15, 2025, to stockholders of record as of December 31, 2024. This announcement is part of the company’s routine financial operations and highlights its commitment to providing returns to shareholders. JMP Securities has reiterated its Market Outperform rating for BrightSpire Capital, maintaining a price target of $7.50. The analyst from JMP Securities expressed optimism about the company’s efforts to address problematic assets, which are expected to be significantly resolved in the upcoming quarters. This positive outlook is based on the company’s progress in managing its asset portfolio, with a projected near-term total return potential of approximately 46%. BrightSpire Capital is scheduled to report its fourth-quarter earnings on February 18, 2025, followed by an earnings call on February 19, 2025. Investors and analysts are keenly anticipating these events for further insights into the company’s financial health and strategies.
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