Apollo Commercial Real Estate (ARI)
NYSE:ARI
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Apollo Real Estate
(NYSE:ARI)
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Rating:63Neutral
Price Target:
$12.00
▲(7.53% Upside)
Action:ReiteratedDate:04/29/26
ARI scores as a moderate-risk opportunity: the biggest drag is financial performance driven by high leverage and weakening TTM revenue with only moderate cash conversion. Offsetting this are solid technical momentum, an attractive dividend yield, and a constructive earnings-call narrative centered on a major liquidity and balance-sheet de-risking transaction plus buybacks, tempered by execution and strategy uncertainty.
Positive Factors
Portfolio sale de‑risking
Selling the ~$9.0B loan portfolio materially reduces asset/liability complexity and credit exposure, enabling immediate debt paydown and simplifying capital structure. This structural reset gives management runway to redeploy capital or pursue strategic options with substantially lower balance‑sheet risk.
Negative Factors
High leverage
A debt‑to‑equity near 4.3x materially amplifies sensitivity to higher funding costs and CRE valuation shocks. Even after asset sales, legacy leverage dynamics can constrain flexibility, increase interest burden volatility, and raise refinancing and covenant risks over the coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Portfolio sale de‑risking
Selling the ~$9.0B loan portfolio materially reduces asset/liability complexity and credit exposure, enabling immediate debt paydown and simplifying capital structure. This structural reset gives management runway to redeploy capital or pursue strategic options with substantially lower balance‑sheet risk.
Read all positive factors
Apollo Real Estate (ARI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.45B
Dividend Yield9.89%
Average Volume (3M)1.58M
Price to Earnings (P/E)14.0
Beta (1Y)0.56
Revenue Growth3.09%
EPS GrowthN/A
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.22
Shares Outstanding132,849,700
10 Day Avg. Volume1,628,413
30 Day Avg. Volume1,578,880
Financial Highlights & Ratios
PEG Ratio-0.06
Price to Book (P/B)0.72
Price to Sales (P/S)1.89
P/FCF Ratio31.77
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue1.92
Enterprise Value/Gross Profit2.90
Enterprise Value/Ebitda2.78
Forecast
1Y Price Target
$11.75Price Target Upside5.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.9
Revenue Forecast (FY)$271.16M
Apollo Real Estate Business Overview & Revenue Model
Company Description
Apollo Commercial Real Estate Finance, Inc. operates as a real estate investment trust (REIT) that originates, acquires, invests in, and manages commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt...
How the Company Makes Money
ARI primarily makes money from the net interest income it earns on its commercial real estate debt investments—especially first mortgage and other senior loans—by borrowing or raising capital and investing it into higher-yielding CRE loans, captur...
Apollo Real Estate Earnings Call Summary
Earnings Call Date:Apr 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call reflected a largely positive restructuring outcome driven by the successful $9.0B portfolio sale, a strengthened liquidity position (~$1.3B cash), debt paydown and a clear path for deleveraging and return of capital. Operational bright spots include leasing momentum at the Brook and strong performance at the Mayflower hotel, alongside accretive share repurchases and an affirmed dividend target (~8% yield on book value). Offsetting items were a modest decline in net interest income (-7.7%), higher interest expense (+8.6%), a small drop in book value per share (-~1.1%), remaining nonaccrual exposure ($42M hotel loan), and execution/timing risk around resolving the remaining REO assets and finalizing a strategic path. Overall, the positives from the transaction, balance sheet de-risking, and shareholder actions outweigh the near-term operational and market headwinds.Positive Updates
Completed $9.0B Loan Portfolio Sale
Closed sale of the company's $9.0 billion loan portfolio to Athene on April 24, resulting in repayment of secured financing facilities and other indebtedness and delivering a compelling premium to ARI stockholders.
Negative Updates
Net Interest Income Decline
Net interest income fell to $36 million in Q1 2026 from $39 million in Q1 2025, a decrease of ~7.7%, reflecting margin pressure despite higher interest income from loans.
Read all updates
Q1-2026 Updates
Positive
Negative
Completed $9.0B Loan Portfolio Sale
Closed sale of the company's $9.0 billion loan portfolio to Athene on April 24, resulting in repayment of secured financing facilities and other indebtedness and delivering a compelling premium to ARI stockholders.
Read all positive updates
Company Guidance
On the call management provided quantitative guidance and near-term milestones: ARI completed the sale of its $9.0 billion loan portfolio and now holds approximately $1.3 billion of cash plus four REO assets with roughly $900 million gross value (two assets — the Brook and the Mayflower — represent ~80% of REO net equity value), with the Brook ~80% leased at market rates and ~70% leased for affordable units (95% of units selected) and expected to stabilize by this summer, the Mayflower generating net cash flow well ahead of budget in Q1 with further upside expected, the Courtland Grand underperforming in Q1 but expected to be brought in line for the year via business‑interruption insurance and World Cup demand, and two former hospital assets totaling about $24 million book value undergoing rezoning discussions; Q1 2026 financials included net income available to common of $23 million ($0.16/diluted share), distributable earnings of $31 million ($0.22/diluted share), net interest income of $36 million (vs. $39 million in Q1 2025), interest income from commercial mortgage loans of $150 million (up from $144 million, driven by ~$1.2 billion portfolio growth on an amortized cost basis), and interest expense of $114 million (up from $105 million); book value per share was $12.01 at 3/31/26 (vs. $12.14 at 12/31/25) with pro forma BVPS of $12.15 at closing of the portfolio sale, share repurchases totaled ~6.8 million shares YTD (2.9M in Q1 at $10.52 avg; 3.9M post‑quarter at $10.72 avg) producing $0.07 BVPS accretion YTD ($0.03 Q1, $0.04 Q2) and a new $150 million repurchase authorization was approved, the Board will announce the Q2 dividend a few weeks before quarter end (targeting an ~8% annualized dividend yield on book value per share, with future dividends likely to include a significant return of capital), and management expects to provide meaningful strategic clarity within the next few months while maintaining conservative, largely unlevered liquidity (REIT asset tests are measured at quarter end, income test annually).Apollo Real Estate Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
43
Neutral
Cash Flow
50
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 709.18M | 710.49M | 701.53M | 777.00M | 641.34M | 421.23M |
| Gross Profit | 469.56M | 568.76M | 560.39M | 649.77M | 549.15M | 357.85M |
| EBITDA | 491.04M | 598.31M | 396.38M | 532.93M | 536.46M | 388.68M |
| Net Income | 126.96M | 126.72M | -119.64M | 58.13M | 265.23M | 223.51M |
Balance Sheet | ||||||
| Total Assets | 10.09B | 9.90B | 8.41B | 9.30B | 9.57B | 8.42B |
| Cash, Cash Equivalents and Short-Term Investments | 126.85M | 139.82M | 317.40M | 225.44M | 222.03M | 343.11M |
| Total Debt | 8.16B | 7.92B | 6.39B | 6.95B | 6.97B | 6.01B |
| Total Liabilities | 8.28B | 8.04B | 6.54B | 7.09B | 7.21B | 6.12B |
| Stockholders Equity | 1.81B | 1.86B | 1.87B | 2.21B | 2.35B | 2.29B |
Cash Flow | ||||||
| Free Cash Flow | 27.59M | 42.31M | 30.75M | 201.23M | 234.67M | 199.25M |
| Operating Cash Flow | 115.77M | 142.52M | 200.26M | 273.86M | 267.70M | 199.38M |
| Investing Cash Flow | -1.16B | -1.39B | 577.17M | 68.42M | -1.34B | -1.36B |
| Financing Cash Flow | 999.43M | 1.06B | -689.31M | -343.36M | 957.97M | 1.18B |
Apollo Real Estate Technical Analysis
Positive
11.16
Price Trends
10.43
Positive
10.09
Positive
9.78
Positive
Market Momentum
0.23
Negative
67.31
Neutral
88.37
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARI, the sentiment is Positive. The current price of 11.16 is above the 20-day moving average (MA) of 10.61, above the 50-day MA of 10.43, and above the 200-day MA of 9.78, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 67.31 is Neutral, neither overbought nor oversold. The STOCH value of 88.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARI.
Apollo Real Estate Risk Analysis
Apollo Real Estate disclosed 67 risk factors in its most recent earnings report. Apollo Real Estate reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Apollo Real Estate Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
63 Neutral | $1.45B | 14.00 | 6.88% | 9.89% | 3.09% | ― | |
61 Neutral | $2.93B | -7.94 | 11.05% | 14.63% | 136.94% | 117.12% | |
60 Neutral | $1.31B | 117.58 | 3.71% | 8.21% | -12.74% | -46.71% | |
55 Neutral | $1.06B | 8.54 | 6.79% | 12.69% | 28.71% | -27.87% | |
54 Neutral | $2.18B | -9.09 | 11.47% | 15.06% | 67.32% | ― | |
53 Neutral | $1.15B | 4.43 | 8.85% | 11.40% | 10.43% | 59.94% |
* Real Estate Sector Average
ARI
Apollo Real Estate
11.04
2.45
28.60%
ARR
ARMOUR Residential REIT
17.73
4.09
29.94%
CIM
Chimera Investment
13.95
3.01
27.47%
DX
Dynex Capital
13.57
3.16
30.29%
PMT
PennyMac Mortgage
12.33
0.98
8.60%
LADR
Ladder Capital
10.34
0.66
6.83%
Apollo Real Estate Corporate Events
Business Operations and StrategyPrivate Placements and FinancingShareholder Meetings
Apollo Real Estate Sells Loan Portfolio, Resets Strategy
Positive
Apr 24, 2026
On April 24, 2026, Apollo Commercial Real Estate Finance, Inc. completed the sale of its roughly $9 billion commercial real estate loan portfolio to Athene Holding Ltd., following approval by a majority of shareholders at a special meeting on Apri...
Business Operations and StrategyM&A TransactionsShareholder Meetings
Apollo Real Estate Shareholders Approve Major Portfolio Sale
Positive
Apr 22, 2026
At a special meeting of stockholders held on April 21, 2026, Apollo Commercial Real Estate Finance, Inc. secured strong shareholder approval to sell its commercial real estate loan portfolio to Athene Holding Ltd. under a previously announced asse...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.