Fannie Mae, Freddie Mac shares tumble after conservatorship comments
Investing.com - Citizens JMP has reiterated its Market Outperform rating and $23.00 price target on Starwood Property Trust (NYSE:STWD), which currently trades at $19.72 with a market capitalization of $7.24 billion. According to InvestingPro data, the company maintains an impressive 9.74% dividend yield and has sustained dividend payments for 17 consecutive years.
The firm noted that Commercial Mortgage REITs, including Starwood Property Trust, underperformed other equity market indices during the second quarter of 2025 amid continued uncertainty surrounding Federal Reserve policy and potential interest rate cuts. Despite market challenges, InvestingPro analysis shows the company maintains strong financial health with a current ratio of 27.37, indicating robust liquidity management.
While the 10-year U.S. Treasury yield ended the quarter nearly unchanged, dropping just one basis point from 4.24% on March 31 to 4.23% on June 30, it experienced significant volatility throughout the period. The yield fell to 3.86% on April 4 following proposed tariff policy changes on April 2, then reversed course to reach 4.63% by May 22, and currently stands at approximately 4.36%.
Citizens JMP highlighted that the volatility was partly triggered by proposed tariff policy changes referred to as Liberation Day on April 2, which contributed to the fluctuating treasury yields throughout the quarter.
The firm also pointed out that Federal Reserve Chairman Jay Powell appears reluctant to lower the Federal Funds rate, which would provide relief to owners of underperforming commercial real estate projects financed with floating-rate bridge loans.
In other recent news, Starwood Property Trust has announced the successful closing of a public offering of 25.5 million shares of common stock, raising approximately $501.5 million in net proceeds. The company plans to use these funds to facilitate its pending acquisition of Fundamental Income Properties, LLC, a deal valued at approximately $2.2 billion. This acquisition includes a portfolio of 467 properties across 44 states, with a 17-year weighted average lease term. Starwood will assume Fundamental’s existing financing facilities totaling $1.3 billion, with the remaining purchase price funded through cash, debt, and equity capital.
Additionally, Starwood released preliminary financial results for the second quarter of 2025, estimating earnings per diluted share between $0.36 and $0.38, and distributable earnings per diluted share between $0.42 and $0.44. The company also declared a dividend of $0.48 per share for the third quarter of 2025. In terms of analyst ratings, JMP Securities reiterated its Market Outperform rating for Starwood Property Trust, citing a price target of $23.00. This rating suggests a potential upside based on Starwood’s consistent dividend rate and other financial metrics.
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