Hold Rating on Blackstone Mortgage Trust Amid Mixed Financial Signals and Market Performance

JMP Securities analyst Steven Delaney has reiterated their neutral stance on BXMT stock, giving a Hold rating on April 10.

Steven Delaney has given his Hold rating due to a combination of factors involving Blackstone Mortgage Trust’s (BXMT) current financial situation and market performance. Despite signs of improving conditions in the Commercial Real Estate (CRE) market, the company reported a GAAP loss in the first quarter of 2024, with distributable earnings falling short of both JMP Securities’ estimates and consensus expectations. Although there were some positive aspects, such as the ability to fully cover dividends when excluding realized losses, the fact remains that the actual dividend coverage ratio was below expectations, highlighting an area of concern for investors. Additionally, the book value per share saw a decline from the previous quarter, indicating a decrease in the intrinsic value of the shares.

The report also points to a lack of new loan origination and a net reduction in the total loan portfolio, which may reflect a cautious or conservative approach by the company in a changing market. A mixed bag of upgrades and downgrades in the loan portfolio’s internal risk ratings further complicates the company’s outlook. On the one hand, there are positive signs with some loans being upgraded, but on the other hand, the increase in downgrades cannot be overlooked. Moreover, the elevated debt-to-equity ratio and the increase to the CECL reserves suggest that there are potential risks on the horizon. Given these mixed signals and the stock’s valuation being in line with the peer group median, Delaney’s Hold rating signifies a neutral stance, suggesting that investors may want to wait for more definitive signs of either improvement or deterioration before making further investment decisions.

According to TipRanks, Delaney is a 4-star analyst with an average return of 7.8% and a 54.90% success rate. Delaney covers the Real Estate sector, focusing on stocks such as Redwood, Arbor Realty, and Kkr Real Estate Finance.

In another report released on April 10, J.P. Morgan also maintained a Hold rating on the stock with a $18.50 price target.

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Blackstone Mortgage (BXMT) Company Description:

Blackstone Mortgage Trust, Inc. is a real estate finance company, which engages in originating senior loans collateralized by commercial real estate. Its investment objective is to preserve and protect shareholder capital while producing risk-adjusted returns primarily through dividends generated from current income from its loan portfolio. The company was founded by Samuel Zell, John R. Klopp, and Craig M. Hatkoff in July 1997 and is headquartered in New York, NY.