Balanced Outlook: Starwood Property’s Resilience and Challenges Lead to Hold Rating

Derek Hewett, an analyst from Bank of America Securities, reiterated the Hold rating on Starwood Property (STWD – Research Report). The associated price target was lowered to $20.00.

Derek Hewett has given his Hold rating due to a combination of factors that reflect both the strengths and challenges faced by Starwood Property. The company has shown resilience in a tough commercial real estate environment, with stable credit and strong liquidity. Additionally, the acceleration in originations and optimism around portfolio growth suggest potential for maintaining dividend stability.
Despite these positive aspects, Hewett believes the risk and reward are balanced, leading to a Hold rating. The company’s earnings per share were in line with expectations, but a slight decrease in other income impacted the results. Furthermore, while the book value per share remained relatively stable, the adjusted leverage increased slightly due to portfolio growth. These elements, combined with a lowered earnings outlook for 2025 and 2026, justify the maintained Neutral stance.

Hewett covers the Real Estate sector, focusing on stocks such as AGNC Investment, Apollo Real Estate, and Blackstone Mortgage. According to TipRanks, Hewett has an average return of 6.6% and a 62.50% success rate on recommended stocks.