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On Monday, Keefe, Bruyette & Woods made an adjustment to the price target for Sunrise Realty Trust (NASDAQ:SUNS), reducing it to $12.25 from the previous $12.75. Despite the price target cut, the firm continues to hold an Outperform rating on the company’s shares.
The rationale behind maintaining the Outperform rating, as stated by the firm, stems from the steady expectations for 2025-2026 earnings per share (EPS), which are based on consistent assumptions regarding originations and yields. The analyst’s commentary highlighted that even though the quarterly dividend was lowered to $0.30 from $0.42, falling short of the anticipated $0.35, there is an anticipation of an upward trend in earnings and, consequently, dividends, paralleling the growth in originations and future fundings. InvestingPro data shows the company maintains a substantial 10.81% dividend yield, making it one of the higher-yielding stocks in its sector. Get access to 6 more exclusive InvestingPro Tips and comprehensive analysis for SUNS through the Pro platform.
Sunrise Realty Trust’s current valuation was also a point of discussion. The shares are deemed appealing at 0.79 times the pro forma book value, which stands at $13.93, especially when compared to the 0.76 times average of its peers. Additionally, the firm’s dividend yield is reported at 10.8%, which is favorable when placed against the 9.5-11.5% range of its competitors.
The adjustment to the price target was attributed to the dividend reset, but the overall positive outlook for Sunrise Realty Trust remains intact according to Keefe, Bruyette & Woods. The firm’s analysis suggests that the company’s financial trajectory is poised to improve in alignment with its business activities and funding operations, which supports the Outperform rating despite the revised price target.
In other recent news, Sunrise Realty Trust reported its fourth-quarter 2024 earnings, surpassing Wall Street expectations with an EPS of $0.27. The company also reported a revenue of $3.4 million, which aligns with its net interest income. Following this, Raymond (NSE:RYMD) James adjusted its price target for Sunrise Realty Trust to $14.50 from $15.00, maintaining an Outperform rating. The adjustment was made after a detailed review of the company’s fourth-quarter results and Form 10-K filing, citing the timing of new investments and increased unfunded commitments as factors for the earnings shortfall.
Meanwhile, Keefe, Bruyette & Woods maintained their Outperform rating and a $12.75 price target for the company. They noted that Sunrise Realty Trust’s GAAP EPS of $0.27 was slightly below their expectation of $0.28, while distributable earnings matched their forecast at $0.30. The company reported loan originations of $75 million in the fourth quarter, with $35 million funded as of March 1, 2025. Despite a dividend reduction to $0.30 per quarter, lower than the estimated $0.35, the firm remains optimistic about the company’s investment strategy.
Sunrise Realty Trust completed a $77 million equity raise in January 2025, impacting the book value per share, which was reported at $13.93 post-equity raise. Analysts from both Raymond James and Keefe, Bruyette & Woods expressed confidence in the company’s strategic focus and future performance, noting the potential for above-average returns on its portfolio under current market conditions.
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