Cautious Outlook on Safehold Amid Mixed Performance Signals

Ki Bin Kim, an analyst from Truist Financial, maintained the Hold rating on Safehold (SAFE – Research Report). The associated price target remains the same with $20.00.

Ki Bin Kim has given his Hold rating due to a combination of factors influencing Safehold’s performance. The company’s first-quarter earnings per share slightly exceeded expectations, primarily due to better-than-anticipated percentage rents, particularly from Park Hotel. However, this positive was somewhat offset by higher credit losses, which were influenced by accounting guidelines and a decrease in office valuations.
Additionally, Safehold’s deal origination was stagnant during the quarter, though the company has several non-binding letters of intent for future deals. These potential deals are expected to yield a 7.3% economic return, but the anticipated funding pace is slightly below market consensus. Given these mixed signals, Ki Bin Kim opted for a Hold rating, reflecting a cautious outlook on the stock’s near-term performance.

In another report released on April 29, Morgan Stanley also maintained a Hold rating on the stock with a $17.00 price target.