Kkr Real Estate Finance (KREF – Research Report), the Real Estate sector company, was revisited by a Wall Street analyst today. Analyst Sarah Barcomb from BTIG remains neutral on the stock and has a $13.50 price target.
Sarah Barcomb’s Buy rating for KKR Real Estate Finance Trust (KREF) is predicated on a confluence of technical and fundamental factors. From a technical perspective, KREF has shown signs of an early-stage turnaround, trading above its key moving averages, which suggests upward momentum. The stock also appears to be at an inflection point, as it has formed a base and is moving towards a potentially more favorable period traditionally seen for small-cap stocks, such as KREF with its approximately $850 million market cap. Moreover, KREF’s valuation at 0.75x book value and its high dividend yield compared to peers further supports the Buy rating.
Furthermore, Barcomb notes that KREF’s management has effectively ringfenced the risk associated with its Office portfolio, maintaining the quality of its Office and non-Office credits. Positive developments, such as partial paydowns and strong leasing activity in certain office assets, alongside conservative loan-to-value ratios, bolster confidence in the portfolio’s robustness. Additionally, despite the potential for some asset quality deterioration in the multifamily portfolio due to changing base rates, KREF’s overall liquidity position and proactive reserves for its Office book underpin the analyst’s view of upside potential. The price target of $13.50 reflects these considerations, pegged at 0.89x Barcomb’s estimated book value per share.
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Kkr Real Estate Finance (KREF) Company Description:
KKR Real Estate Finance Trust, Inc. is a real estate finance company, which focuses primarily on originating and acquiring senior loans secured by commercial real estate assets. Its target assets include mezzanine loans, preferred equity and other debt-oriented instruments. The company’s investment objective is capital preservation and generating attractive risk-adjusted returns for its stockholders over the long term, primarily through dividends. KKR Real Estate Finance Trust was founded on October 2, 2014 and is headquartered in New York, NY.
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