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Franklin BSP Realty Trust (FBRT)
NYSE:FBRT

Franklin BSP Realty Trust (FBRT) AI Stock Analysis

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Franklin BSP Realty Trust

(NYSE:FBRT)

Rating:57Neutral
Price Target:
$11.00
▲(0.64%Upside)
Franklin BSP Realty Trust presents a mixed outlook. Key strengths include operational efficiency improvements and strategic acquisitions, particularly NewPoint, which bolster growth prospects. However, challenges remain with revenue stability, cash flow volatility, and potential dividend coverage issues, contributing to a cautious overall score.
Positive Factors
Business Expansion
Franklin BSP Realty Trust, Inc. is adding a new business line that positions FBRT to be a leading multi-channel CMREIT.
Loan Portfolio
The loan portfolio is backed by 99% senior (first mortgage) loans and 93% of the portfolio is floating rate.
Negative Factors
Dividend Coverage
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.
Portfolio Stability
The company has yet to reach stability in either its watchlist or its REO portfolio, and the dividend remains uncovered for the third straight quarter.

Franklin BSP Realty Trust (FBRT) vs. SPDR S&P 500 ETF (SPY)

Franklin BSP Realty Trust Business Overview & Revenue Model

Company DescriptionFranklin BSP Realty Trust (FBRT) is a real estate investment trust (REIT) that primarily focuses on originating, acquiring, and managing a diversified portfolio of commercial real estate debt investments. The company operates predominantly within the commercial real estate sector, providing capital solutions to property owners and investors across various property types, including office, multifamily, industrial, and retail.
How the Company Makes MoneyFranklin BSP Realty Trust generates revenue primarily through interest income from its portfolio of commercial real estate debt investments. These investments include first mortgage loans, subordinate loans, and other real estate-related securities. The company earns interest income by providing these loans and collecting interest payments over the life of the loan. Additionally, FBRT may also receive income from fees associated with loan origination and other services. The trust's earnings are largely influenced by the interest rate environment, the credit quality of its borrowers, and the overall performance of the commercial real estate market. Strategic partnerships with real estate professionals and financial institutions also play a role in sourcing and managing its investment opportunities.

Franklin BSP Realty Trust Earnings Call Summary

Earnings Call Date:Apr 28, 2025
(Q1-2025)
|
% Change Since: -2.93%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view of FBRT's performance. While there were strong highlights such as robust loan origination, strategic focus on multifamily, and the promising acquisition of NewPoint, there were significant lowlights including negative distributable earnings, challenges with REO and nonperforming loans, and concerns over dividend coverage. The sentiment reflects cautious optimism with acknowledgment of current challenges.
Q1-2025 Updates
Positive Updates
Strong Loan Origination and Portfolio Management
FBRT originated $341 million in new loan commitments in Q1 2025, with new loans enhancing the portfolio due to high-quality properties and low loan-to-value ratios. This positions FBRT well in volatile markets.
Significant Loan Repayments
FBRT received $353 million in loan repayments, with 56% of the portfolio now originated post-interest rate hike, indicating a high-quality mortgage REIT portfolio.
Pending Acquisition of NewPoint
The acquisition of NewPoint, set to close early in Q3 2025, is expected to provide meaningful synergies and enhance FBRT's strategic focus on the multifamily sector.
Multifamily Sector Focus
Multifamily accounted for 79% of FBRT's total origination volume in Q1 2025, indicating a strategic focus on this sector.
Strong Liquidity Position
FBRT reported liquidity of $913 million at the end of Q1 2025, including $215 million in unrestricted cash, providing a strong base for future operations.
Negative Updates
Negative Distributable Earnings
FBRT reported negative distributable earnings of $6.2 million due to realized losses in the office asset REO portfolio.
Impact of REO and Nonperforming Loans
REO and nonperforming loans negatively impacted earnings, with plans to liquidate assets causing short-term drag on earnings.
Concerns Over Long-term Dividend Coverage
FBRT anticipates potential shortfalls in dividend coverage due to REO and nonperforming loan portfolios, suggesting a possible need to revisit dividend policy.
Increased Watch List and REO Portfolio
Four loans were added to the watch list in Q1 2025, and the foreclosure REO portfolio had 12 positions, indicating ongoing challenges in portfolio management.
Company Guidance
During the Franklin BSP Realty Trust First Quarter 2025 Earnings Conference Call, the company provided detailed guidance on several key metrics. They reported originating $341 million in new loan commitments, with multifamily loans accounting for 79% of the total. The company received $353 million in loan repayments, bringing the percentage of their portfolio originated post-interest rate hike to 56%. The REO portfolio accounted for a near-term drag on earnings, with $38.6 million in realized losses impacting distributable earnings, reported as negative $6.2 million or negative $0.12 per fully converted share. Liquidity stood at $913 million, including $215 million in unrestricted cash, and the average risk rating at quarter-end was 2.2. The company also highlighted the strategic acquisition of NewPoint, which is expected to close early in the third quarter, aiming to expand their market reach and enhance earnings quality.

Franklin BSP Realty Trust Financial Statement Overview

Summary
Franklin BSP Realty Trust 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, highlighting 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
53
Neutral
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.
Balance Sheet
61
Positive
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.
Cash Flow
47
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue571.78M548.92M230.79M367.36M221.65M184.17M
Gross Profit172.00M210.45M-108.63M201.65M160.81M113.96M
EBITDA89.51M116.41M163.18M106.55M167.07M64.58M
Net Income57.02M68.89M145.22M14.43M25.70M54.75M
Balance Sheet
Total Assets5.65B6.00B5.96B6.20B9.47B3.19B
Cash, Cash Equivalents and Short-Term Investments382.56M387.42M343.69M415.04M154.93M82.07M
Total Debt0.004.31B4.18B4.45B7.57B2.15B
Total Liabilities4.06B4.48B4.28B4.63B7.76B2.39B
Stockholders Equity1.50B1.51B1.65B1.56B1.71B798.44M
Cash Flow
Free Cash Flow160.50M57.23M197.39M151.85M3.03B115.33M
Operating Cash Flow160.50M57.23M197.39M152.51M146.50M115.33M
Investing Cash Flow270.80M-155.47M380.81M3.10B1.07B240.69M
Financing Cash Flow-79.38M-48.58M-424.99M-3.23B-1.14B-373.00M

Franklin BSP Realty Trust Technical Analysis

Technical Analysis Sentiment
Positive
Last Price10.93
Price Trends
50DMA
10.79
Positive
100DMA
11.41
Negative
200DMA
11.62
Negative
Market Momentum
MACD
0.01
Negative
RSI
59.74
Neutral
STOCH
59.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FBRT, the sentiment is Positive. The current price of 10.93 is above the 20-day moving average (MA) of 10.65, above the 50-day MA of 10.79, and below the 200-day MA of 11.62, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 59.74 is Neutral, neither overbought nor oversold. The STOCH value of 59.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
EFEFC
65
Neutral
$1.24B9.549.59%11.85%11.91%52.26%
64
Neutral
$7.01B18.92-1.36%6.84%4.67%-25.39%
CICIM
63
Neutral
$1.16B9.618.09%10.32%7.13%64.82%
MFMFA
62
Neutral
$999.84M9.927.34%14.78%26.34%79.07%
DXDX
60
Neutral
$1.37B16.546.01%15.93%73.74%-34.10%
57
Neutral
$990.26M16.335.07%12.99%-6.28%-49.57%
RCRC
46
Neutral
$794.56M-12.42%10.73%-31.47%-204.79%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FBRT
Franklin BSP Realty Trust
10.93
-0.22
-1.97%
CIM
Chimera Investment
14.34
2.53
21.42%
DX
Dynex Capital
12.81
2.66
26.21%
EFC
Ellington Financial
13.16
2.28
20.96%
MFA
MFA Financial
9.74
0.49
5.30%
RC
Ready Capital
4.66
-2.78
-37.37%

Franklin BSP Realty Trust Corporate Events

M&A TransactionsBusiness Operations and Strategy
Franklin BSP Realty Trust Completes Major Acquisition
Positive
Jul 1, 2025

On July 1, 2025, Franklin BSP Realty Trust, Inc. completed the acquisition of NewPoint Holdings JV L.L.C. for $425 million, marking a significant strategic expansion in its multifamily lending capabilities. This acquisition is expected to enhance FBRT’s long-term stockholder value by integrating agency lending capabilities and creating a comprehensive lending solution, thereby positioning the company for future growth and opportunities in partnership with NewPoint.

The most recent analyst rating on (FBRT) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on Franklin BSP Realty Trust stock, see the FBRT Stock Forecast page.

Private Placements and Financing
Franklin BSP Realty Trust Issues $107M in Senior Notes
Neutral
Jun 20, 2025

On June 20, 2025, Franklin BSP Realty Trust, Inc. announced the issuance of $107 million in unsecured senior notes through its operating partnership, FBRT OP LLC. The issuance includes $82 million of fixed-rate notes due in 2030 and $25 million of floating-rate notes due in 2028. The proceeds are expected to be used for general corporate purposes, potentially including the acquisition of NewPoint Holdings JV LLC. The notes were offered to qualified institutional buyers and accredited investors under specific regulatory exemptions, and they will not initially be registered under the Securities Act.

The most recent analyst rating on (FBRT) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on Franklin BSP Realty Trust stock, see the FBRT Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Franklin BSP Realty Trust Holds Annual Stockholder Meeting
Neutral
Jun 2, 2025

On May 28, 2025, Franklin BSP Realty Trust, Inc. held its annual meeting of stockholders where several key decisions were made. The stockholders elected seven directors to the board for one-year terms and ratified the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2025. However, a proposal to eliminate supermajority voting requirements was not approved, while the advisory vote on executive compensation was passed.

The most recent analyst rating on (FBRT) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on Franklin BSP Realty Trust stock, see the FBRT Stock Forecast page.

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.Date of analysis: Jul 02, 2025