Analyst Steven Delaney from JMP Securities reiterated a Buy rating on Kkr Real Estate Finance (KREF – Research Report) and decreased the price target to $12.00 from $13.00.
Steven Delaney has given his Buy rating due to a combination of factors surrounding KKR Real Estate Finance Trust Inc. (KREF). Despite a decrease in book value per share and a GAAP loss in the first quarter of 2024, Delaney observed that distributable earnings surpassed consensus estimates, providing a dividend coverage ratio of 156%. The analyst’s confidence is further backed by KREF’s distributable earnings, which comfortably covered the quarterly dividend, indicating a stable income stream for investors.
Moreover, Delaney’s outlook factors in KREF’s substantial liquidity position and a strong portfolio composition, with the majority being senior and floating-rate loans, predominantly in multifamily and office properties. The expectation of KREF taking ownership of properties behind high-risk loans, which would result in significant realized losses reflected in future earnings, has been considered in the analysis. However, the potential total return of approximately 30% based on the new price target, along with a high dividend yield, underpins the Buy rating. Delaney’s analysis suggests that KREF’s financial position and strategic management of its loan portfolio present a favorable investment opportunity despite the anticipated near-term challenges.
Delaney covers the Real Estate sector, focusing on stocks such as Redwood, Arbor Realty, and Kkr Real Estate Finance. According to TipRanks, Delaney has an average return of 7.8% and a 54.90% success rate on recommended stocks.
In another report released on April 10, J.P. Morgan also maintained a Buy rating on the stock with a $10.00 price target.
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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.
