Japan PPI inflation slips to 11-mth low in July
On Tuesday, Keefe, Bruyette & Woods made a revision to the price target on Arbor Realty Trust (NYSE:ABR) shares, lowering it to $12.00 from the previous $13.50, while the firm maintained a Market Perform rating on the stock. The adjustment follows the release of Arbor Realty Trust’s fourth-quarter 2024 results and its outlook for 2025.
The revised price target reflects a 15-20% reduction in estimates, which aligns with Arbor Realty Trust’s 2025 projections. The changes in estimates are attributed to a decrease in balance sheet and agency originations, along with an uptick in loan modifications and non-performing loans (NPLs). Despite earlier market optimism about credit conditions potentially improving, the fourth quarter saw sustained challenges, primarily due to an increase in troubled loans.
Arbor Realty Trust is currently trading at 1.03 times its tangible book value, which stands at $11.82. The estimated dividend yield is anticipated to be around 9.9%, assuming a dividend reduction to $0.30 from $0.43. Notably, InvestingPro data shows the company has maintained dividend payments for 13 consecutive years, with a current yield of approximately 14.7%. This forecasted yield takes into account the company’s current market conditions and the adjustments made to the dividend.
The analyst from Keefe, Bruyette & Woods commented on the situation, explaining the rationale behind the maintained Market Perform rating: "Post-4Q24, we reduce estimates by 15-20% consistent with ABR’s 2025 outlook. Our reduced estimates are driven by lower balance sheet and agency originations and higher loan modifications and NPLs. While the market had been optimistic that credit showed signs of bottoming, fourth quarter challenges continued, driven by an increase in troubled loans."
In light of the credit uncertainties that persist, Keefe, Bruyette & Woods has decided to uphold the Market Perform rating for Arbor Realty Trust. This stance indicates a neutral perspective on the stock’s potential performance, considering the current financial environment and the company’s recent financial outcomes.
In other recent news, Arbor Realty Trust reported its fourth-quarter 2024 earnings, exceeding analyst expectations with an EPS of $0.40, compared to the forecast of $0.382. The company’s revenue also surpassed projections, reaching $151.71 million versus the anticipated $148.81 million. Despite these positive earnings results, Raymond (NSE:RYMD) James downgraded Arbor Realty Trust’s stock rating from Outperform to Market Perform, citing challenges such as rising interest rates and a decrease in new loan originations. Additionally, JMP Securities adjusted its outlook on Arbor Realty Trust, reducing its price target to $15.00 from $16.50, while maintaining a Market Outperform rating. Arbor Realty Trust has provided guidance for 2025, projecting quarterly Distributable EPS to be between $0.30 and $0.35, taking into account the impact of higher interest rates. The company also plans to adjust its dividend to approximately $0.33 per quarter, aligning with its expected performance. These developments reflect the ongoing challenges faced by Arbor Realty Trust in the current economic environment, characterized by elevated interest rates.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.