Safehold’s Financial Outlook: Hold Rating Amid Economic Uncertainty and Interest Rate Volatility

In a report released today, Ronald Kamdem from Morgan Stanley maintained a Hold rating on Safehold (SAFE – Research Report), with a price target of $17.00.

Ronald Kamdem has given his Hold rating due to a combination of factors impacting Safehold’s financial outlook. The company, which owns a substantial portfolio of ground leases, is facing challenges due to economic uncertainty and interest rate volatility. These factors have led to a significant decline in investment activity from a record high in 2022 to much lower levels in 2023 and 2024.
Kamdem also notes that the long-term nature of Safehold’s assets makes them particularly sensitive to changes in interest rates, which could further impact the company’s ability to fund or acquire new ground leases. As a result, the projected AFFO for 2025 and 2026 has been lowered, along with the price target for the stock. Despite these challenges, some offsetting factors such as reduced general and administrative expenses and lower interest costs have been considered in the valuation, leading to a Hold rating.

Kamdem covers the Real Estate sector, focusing on stocks such as Healthpeak Properties, Highwoods Properties, and Hudson Pacific Properties. According to TipRanks, Kamdem has an average return of 4.9% and a 55.44% success rate on recommended stocks.