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Raymond (NSE:RYMD) James has reaffirmed its Strong Buy rating on Franklin BSP Realty Trust (NYSE:FBRT) with a steady price target of $15.50. Analyst Stephen Laws, following a thorough review of the company’s fourth-quarter results and annual report, has adjusted near-term earnings estimates for the real estate investment trust. Despite the revisions, the analyst anticipates an earnings increase throughout 2025 as the company undertakes new investments and increases its portfolio leverage.
The analyst’s optimism is partly based on the expectation that earnings will rise once issues with real estate owned (REO) properties are resolved and the capital tied up in these assets is redirected into new commercial real estate (CRE) loan investments. Management has indicated that the capital currently supporting REOs could add $0.25 to $0.30 to annual earnings per share when reinvested. InvestingPro analysis reveals the company maintains a generous 10.8% dividend yield and has remained profitable over the last twelve months.
The Strong Buy rating is also supported by the trust’s portfolio composition, which includes a high percentage of multifamily loans, accounting for 72% of its portfolio, and minimal office exposure at only 4%. Additionally, more than half of the portfolio has been originated since January 2023, and a significant portion, 89%, is financed in a way that does not require mark-to-market valuation, which could provide stability to the trust’s earnings. The company’s financial health metrics from InvestingPro show a solid current ratio of 1.39 and an impressive gross profit margin of 94.7%.Want deeper insights? Access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, covering FBRT and 1,400+ other US stocks with detailed analysis and actionable intelligence.
Raymond James’ price target of $15.50 per share remains unchanged, reflecting confidence in the trust’s strategic growth and the robust characteristics of its investment portfolio. Franklin BSP Realty Trust’s management team’s comments during the conference call have further bolstered this outlook, as they have outlined a clear strategy for capital reinvestment that is expected to contribute positively to future earnings. Analysts tracked by InvestingPro forecast the company to remain profitable this year, with projected earnings per share of $1.62 for FY2025.
In other recent news, Franklin BSP Realty Trust has garnered attention with several key developments. B.Riley analysts have reaffirmed a Buy rating for the company, setting a price target of $15.00. They expect Franklin BSP Realty Trust’s upcoming fourth-quarter 2024 results to exceed consensus expectations, highlighting the company’s strong origination activity despite challenges from high interest rates. The firm’s liquidity stands at approximately $1.1 billion, with a $1.5 billion pipeline indicating effective capital allocation. Additionally, Franklin BSP Realty Trust announced an amendment to the rights of its Series H Convertible Preferred Stock holders, extending the mandatory conversion date to January 21, 2026. This amendment allows more flexibility for the sole holder to convert shares monthly through December 2025. The SEC filing regarding this amendment ensures that investors are informed about changes in the company’s capital structure. These developments reflect Franklin BSP Realty Trust’s strategic positioning in navigating the current economic landscape.
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