Safehold Inc.: Stable Performance with Limited Growth Prospects Justifies Hold Rating

Ronald Kamdem, an analyst from Morgan Stanley, maintained the Hold rating on Safehold (SAFE – Research Report). The associated price target remains the same with $17.00.

Ronald Kamdem has given his Hold rating due to a combination of factors that reflect the current state and future outlook of Safehold Inc. The company’s recent financial performance has been stable, with earnings aligning with expectations, but there were no new originations in the latest quarter, which could indicate a pause in growth momentum. Additionally, the pipeline of non-binding letters of intent suggests potential future activity, but these are not guaranteed to materialize.
Safehold’s portfolio metrics, such as the gross book value and unlevered cash yield, have remained relatively unchanged, indicating a steady but not necessarily expanding business environment. The company’s liquidity position is strong, with significant cash reserves and no debt maturities until 2027, which provides a buffer against potential market volatility. However, the unchanged debt-to-equity ratio and rent coverage suggest that while the company is financially stable, there is limited immediate upside potential, justifying a Hold rating.

In another report released yesterday, Truist Financial also maintained a Hold rating on the stock with a $20.00 price target.