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Franklin BSP Realty Trust (FBRT)
NYSE:FBRT
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Franklin BSP Realty Trust
(NYSE:FBRT)
66Neutral
Positive Factors
Business Expansion
The company is adding a new business line that positions FBRT to be a leading multi-channel CMREIT.
Financial Flexibility
FBRT has ample liquidity, particularly after closing a $1.02B CLO, providing financial flexibility.
Loan Portfolio
The loan portfolio is backed by 99% senior loans and 93% of the portfolio is floating rate, suggesting a lower risk profile and adaptability to interest rate changes.
Negative Factors
Asset Management Challenges
The company saw several REO additions in 3Q, particularly in multifamily properties, which could signal ongoing challenges in asset management.
Dividend Coverage
FBRT failed to cover its dividend for the second consecutive quarter, raising concerns about financial stability.
Financial Performance
FBRT reported fourth-quarter GAAP EPS of $0.29 and distributable EPS of $0.30, which did not fully cover the $0.355 per share quarterly dividend.
Franklin BSP Realty Trust (FBRT) vs. S&P 500 (SPY)
Market Cap
$980.00M
Dividend Yield11.91%
Average Volume (3M)434.94K
Price to Earnings (P/E)14.5
Beta (1Y)0.89
Revenue Growth-2.50%
EPS Growth-42.41%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength78
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.81
Shares Outstanding82,214,630
10 Day Avg. Volume512,970
30 Day Avg. Volume434,944
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.09
Price to Cash Flow (P/CF)-4.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.38Price Target Upside29.03% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Franklin BSP Realty Trust Business Overview & Revenue Model
Company DescriptionFranklin BSP Realty Trust, Inc., a real estate finance company, originates, acquires, and manages a portfolio of commercial real estate debt secured by properties located in the United States. The company also originates conduit loans; and invests in commercial real estate securities, as well as owns real estate acquired through foreclosure and deed in lieu of foreclosure, and purchased for investment. In addition, it invests in commercial real estate debt investments, which includes first mortgage loans, mezzanine loans, bridge loans, and other loans related to commercial real estate. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Benefit Street Partners Realty Trust, Inc. Franklin BSP Realty Trust, Inc. was incorporated in 2012 and is headquartered in New York, New York.
How the Company Makes MoneyFBRT generates revenue primarily through interest income from its portfolio of commercial real estate loans. The company lends capital to property owners and operators, securing these loans with the underlying real estate as collateral. In addition to interest income, FBRT may also earn fee income from loan origination and servicing. The trust may engage in strategic partnerships or collaborations with other financial institutions to expand its lending capabilities and investment opportunities. Key factors contributing to FBRT's earnings include the performance of the real estate market, interest rate fluctuations, and the company's ability to effectively manage its loan portfolio and mitigate credit risk.
Franklin BSP Realty Trust Financial Statement Overview
Summary
Franklin BSP Realty Trust presents a mixed financial picture. The income statement shows operational efficiency improvements but struggles with revenue consistency. The balance sheet is strong with reduced leverage, yet asset management requires attention. Cash flow reflects volatility, emphasizing the need for better cash generation. Overall, the company has strengths in operational efficiency but faces challenges in revenue stability and cash flow consistency.Income Statement
Franklin BSP Realty Trust has shown fluctuating revenue with a noticeable decline in the most recent year. The company experienced negative gross profit in 2023 and a significant drop in net income in 2024. However, EBIT and EBITDA margins have improved, indicating better operational efficiency. Overall, the income statement reflects instability in revenue but some operational improvements.53
Neutral
Balance Sheet
The balance sheet shows a strong equity base with no total debt reported in the latest year, suggesting reduced leverage risk. However, the equity ratio has been inconsistent, reflecting potential asset management issues. Overall, the balance sheet is stable, with a strong equity position and reduced leverage risk, but the fluctuations in equity ratio indicate areas for improvement.61
Positive
Cash Flow
The cash flow statement indicates volatility, with operating cash flow dropping to zero in the most recent year. Free cash flow also saw a decline, indicating cash management challenges. The company needs to focus on improving cash generation consistency to enhance financial stability.47
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 548.92M | 230.79M | 367.36M | 221.65M | 184.17M | Gross Profit |
| 210.45M | -108.63M | 201.65M | 160.81M | 113.96M | EBIT |
| 406.24M | 154.77M | 52.31M | 164.96M | 62.35M | EBITDA |
| 116.41M | 163.18M | 106.55M | 167.07M | 64.58M | Net Income Common Stockholders |
| 68.89M | 145.22M | 14.43M | 25.70M | 54.75M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 387.42M | 343.69M | 415.04M | 154.93M | 82.07M | Total Assets |
| 6.00B | 5.96B | 6.20B | 9.47B | 3.19B | Total Debt |
| 4.31B | 4.18B | 4.45B | 7.57B | 2.15B | Net Debt |
| 4.13B | 3.85B | 4.27B | 7.42B | 2.07B | Total Liabilities |
| 4.48B | 4.28B | 4.63B | 7.76B | 2.39B | Stockholders Equity |
| 1.51B | 1.65B | 1.56B | 1.71B | 798.44M |
| Cash Flow | Free Cash Flow | |||
| 57.23M | 197.39M | 151.85M | 3.03B | 115.33M | Operating Cash Flow |
| 57.23M | 197.39M | 152.51M | 146.50M | 115.33M | Investing Cash Flow |
| 222.84M | 380.81M | 3.10B | 1.07B | 240.69M | Financing Cash Flow |
| -48.58M | -424.99M | -3.23B | -1.14B | -373.00M |
Franklin BSP Realty Trust Technical Analysis
Negative
11.92
Price Trends
12.68
Negative
12.43
Negative
12.25
Negative
Market Momentum
>-0.01
Positive
44.81
Neutral
30.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FBRT, the sentiment is Negative. The current price of 11.92 is below the 20-day moving average (MA) of 12.72, below the 50-day MA of 12.68, and below the 200-day MA of 12.25, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 44.81 is Neutral, neither overbought nor oversold. The STOCH value of 30.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FBRT.
Franklin BSP Realty Trust Risk Analysis
Franklin BSP Realty Trust disclosed 56 risk factors in its most recent earnings report. Franklin BSP Realty Trust 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
Franklin BSP Realty Trust Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $6.15B | 16.56 | 5.55% | 10.54% | -0.97% | 3.75% | |
68 Neutral | $1.35B | 12.32 | 7.06% | 8.68% | -5.09% | 6.25% | |
66 Neutral | $980.00M | 14.54 | 5.79% | 11.91% | -2.50% | -42.41% | |
61 Neutral | $4.44B | 16.16 | -3.31% | 11.40% | 5.81% | -21.40% | |
61 Neutral | $1.21B | ― | -6.02% | 12.61% | -9.71% | -426.57% | |
60 Neutral | $3.31B | ― | -5.01% | 11.06% | -12.86% | -182.05% | |
58 Neutral | $609.15M | 10.07 | 6.45% | 12.77% | -10.05% | ― |
* Real Estate Sector Average
Performance Comparison
FBRT
Franklin BSP Realty Trust
11.92
0.54
4.75%
ARI
Apollo Real Estate
8.72
-1.12
-11.38%
BXMT
Blackstone Mortgage
18.35
1.17
6.81%
STWD
Starwood Property
18.22
0.30
1.67%
LADR
Ladder Capital
10.60
0.62
6.21%
TRTX
Tpg Re Finance
7.52
0.67
9.78%
Franklin BSP Realty Trust Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -5.70% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company in transition, making significant strides in loan origination post-interest rate hikes and focusing on high-performing multifamily assets. However, challenges with dividend coverage, non-accrual loans, and office sector exposure remain. Overall, the company is well-positioned financially but faces operational hurdles in specific areas.Highlights
Strong Loan Origination Post-Interest Rate Hikes
FBRT originated $2 billion in new loan commitments in 2024, with $441 million in the fourth quarter. 52% of the portfolio consists of loans originated post-interest rate hikes, considered the most attractive in years.
Multifamily Focus and Success
Multifamily loans make up 71% of the portfolio. The company originated $441 million in new loan commitments during the quarter, primarily in the multifamily sector, which comprised 68% of activity.
Significant REO Sales and Reduction
The REO portfolio saw a decline by approximately $63 million through asset sales in Q4, with an additional sale after quarter end for $63.8 million. The REO portfolio is expected to contribute an additional $0.25 to $0.30 to distributable earnings annually once resolved.
High Liquidity Position
FBRT ended the year with $535 million in liquidity, including $184 million in unrestricted cash, providing strategic investment opportunities.
Lowlights
Dividend Coverage Challenges
FBRT did not reach dividend coverage for the quarter, although current dividend levels are considered appropriate given future earnings potential.
Non-Accrual Loans and REO Positions Impact
Earnings were negatively affected by non-accrual loans and REO positions, which continue to impact distributable earnings in the short term.
Office Sector Exposure and Challenges
Traditional multi-tenant office exposure, though reduced to 2.3% of the total portfolio, remains a concern. The Denver office building is anticipated to become REO in Q1 or Q2 of 2025.
Company Guidance
During the Franklin BSP Realty Trust fourth quarter 2024 earnings call, the company provided guidance highlighting several key metrics and developments. In 2024, FBRT originated $2 billion in new loan commitments, with $441 million in the fourth quarter, and 52% of the portfolio now consists of loans originated after interest rate hikes. The portfolio ended the year flat compared to 2023, with a principal balance of $5.0 billion, offset by $1.6 billion in repayments. The company's liquidity stood at $535 million, including $184 million in unrestricted cash, and the portfolio's risk rating averaged 2.3. Despite not achieving dividend coverage this quarter, FBRT is optimistic about future earnings potential, targeting improvements through active management of legacy loans and strategic originations. The watchlist at year-end comprised 3.8% of the portfolio, which is expected to decrease with recent asset sales. Distributable earnings for the year were $0.92 per diluted common share, affected by non-accrual loans and REO positions.Franklin BSP Realty Trust Corporate Events
M&A TransactionsBusiness Operations and Strategy
Franklin BSP Realty Trust Expands with NewPoint Acquisition
Positive
Mar 10, 2025
On March 9, 2025, Franklin BSP Realty Trust, Inc. announced its acquisition of NewPoint Holdings JV LLC, a commercial real estate finance company. The transaction, expected to close in the third quarter of 2025, aims to expand FBRT’s multifamily lending offerings and increase its market reach. The acquisition is anticipated to enhance FBRT’s earnings power and diversify its business lines, including agency and mortgage servicing. This strategic move is expected to create a comprehensive one-stop client solution, enhance long-term stockholder value, and potentially allow FBRT to trade at a premium to book value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.