Blackstone Mortgage Trust: Hold Rating Reiterated Amid Balanced Risk/Reward Profile and Liquidity Strength

Blackstone Mortgage (BXMT – Research Report), the Real Estate sector company, was revisited by a Wall Street analyst today. Analyst Derek Hewett from Bank of America Securities reiterated a Hold rating on the stock and has a $19.50 price target.

Derek Hewett has given his Hold rating due to a combination of factors impacting Blackstone Mortgage Trust. The company reported a decent quarter with Distributable EPS aligning closely with forecasts, although it fell short of covering the quarterly dividend. This shortfall was attributed to the timing of fundings and repayments, which slightly dragged on earnings. Despite this, the company has been actively working to de-risk its portfolio while maintaining strong liquidity, evidenced by an increase in liquidity to $1.6 billion and a reduction in recourse leverage to 3.4x.
Additionally, while credit stability is noted, the proportion of risk-rated 4/5 loans remains elevated, though stable. The resolution of impaired assets has positively impacted the Book Value Per Share (BVPS), which saw a slight decline. The forecast for 2025 earnings has been slightly lowered due to anticipated lower spread income, though this is partially offset by higher earnings from Real Estate Owned (REO) assets. Overall, the risk/reward profile is considered balanced, leading to the reiteration of a Neutral rating.

In another report released yesterday, KBW also maintained a Hold rating on the stock with a $19.50 price target.