On Wednesday, Blackstone Mortgage Trust (NYSE:BXMT) shares received continued support from a market analyst at BTIG, with a reiterated Buy rating and a steady price target of $23.00. The company's recent financial report showed distributable earnings per share (EPS) of $0.49, surpassing both BTIG's estimate by $0.05 and the consensus estimate by $0.04.
These figures included a loss of $12.5 million from asset resolutions, which, together with the $61.0 million in losses from the first quarter of 2024, matched the management's forecasted loss range of $70 million to $80 million for the first half of 2024.
Blackstone (NYSE:BX) Mortgage Trust's distributable EPS, excluding the mentioned charge-offs, was $0.56, aligning with the analyst's predictions. Still, the company's GAAP EPS was reported at a loss of $0.35, primarily due to a larger than anticipated second quarter reserve for credit losses, known as the CECL reserve, amounting to $152.4 million.
Consequently, the total CECL reserve has escalated to $906 million, or $5.21 per share, a notable increase from $766 million in the first quarter.
The increase in the CECL reserve was not the only challenge noted in the report. The company's watchlist, which tracks loans that may become non-performing, grew from 22.8% to 27.1% of the overall portfolio at the end of the quarter. In response to these challenges, the Board of Blackstone Mortgage Trust decided to reduce its quarterly dividend from $0.62 per share to $0.47 per share.
Due to these developments, the analyst from BTIG has indicated that their estimates for Blackstone Mortgage Trust are currently under review. This statement suggests that the firm is reassessing its projections in light of the latest financial outcomes and the adjustments made by the company's Board.
In other recent news, Blackstone Mortgage Trust posted a GAAP net loss of $0.71 per share for the first quarter of 2024, despite distributable earnings of $0.33 per share and $0.55 before charge-offs. The company also declared a dividend of $0.62 per share and maintained near-record liquidity levels at $1.7 billion.
BTIG set a new price target on Blackstone Mortgage Trust at $23, initiating a buy rating. The firm noted Blackstone's substantial loan commitment of $26.4 billion and its competitive edge as the largest pure-play transitional lender in its sector.
Blackstone Mortgage Trust also confirmed the re-election of nine directors and ratified the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for 2024. Wolfe Research initiated coverage of the company, assigning a Peer Perform rating and highlighting its substantial net loan exposure of $21.1 billion. The company upgraded nine loans, downgraded 13, and resolved two impaired loans, demonstrating its active portfolio management.
In the broader market, U.S. office loan delinquencies experienced an increase in June, according to Fitch Ratings. The total amount of loans that were at least 30 days late rose to $1.92 billion from $1.86 billion, with office loans constituting 55% of the 30-day delinquent loans. These are among the recent developments for Blackstone Mortgage Trust.
InvestingPro Insights
In light of Blackstone Mortgage Trust's recent financial performance and the market's response, InvestingPro provides additional insights that could be of interest to investors. According to InvestingPro data, Blackstone Mortgage Trust has a market capitalization of $3.14 billion, with a strikingly high P/E ratio of 682.41, which may signal that the stock is trading at a premium compared to earnings. Moreover, the company's dividend yield stands at an attractive 12.63%, which may appeal to income-focused investors, especially considering the company has maintained dividend payments for 13 consecutive years.
Still, it is important to note that analysts are anticipating a sales decline in the current year, which could impact future dividend sustainability. Despite this, Blackstone Mortgage Trust's liquid assets exceed short-term obligations, indicating a solid position to meet immediate financial liabilities. Two InvestingPro Tips for BXMT highlight its significant dividend to shareholders and the expectation of profitability for the current year. For a deeper analysis and more tips, investors can explore InvestingPro, where 5 additional tips are available. To enhance your investment strategy with these insights, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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