On Friday, Keefe, Bruyette & Woods (KBW) adjusted its outlook on New York Mortgage Trust (NASDAQ:NYMT), lowering the price target from $8.50 to $7.00, while maintaining a Market Perform rating on the stock. This revision follows New York Mortgage Trust's recent earnings report, which revealed an undepreciated earnings per share (EPS) of -$0.68, falling short of both KBW and consensus estimates.
The firm cited increased expenses as the primary reason for the reduction in EPS estimates. Consequently, KBW has revised its EPS forecasts for the years 2024 and 2025 to -$0.48 and +$0.52, respectively, down from the previous estimates of $0.65 and $0.85.
The analyst's report highlighted a notable decline in the company's adjusted book value, which dropped by 9.1% to $11.51 from $12.66. Similarly, the GAAP book value decreased to $10.21 from $11.31. The overall economic return for the quarter was reported at -7.5%.
Despite the stock appearing inexpensive at approximately 53% of the adjusted book value, KBW expressed caution, opting to stay on the sidelines due to the lack of clear visibility on long-term earnings and uncertainties surrounding the multifamily book. The new price target represents 60% of the adjusted book value, a decrease from the previous multiple of 70%.
InvestingPro Insights
Amidst the revised outlook by Keefe, Bruyette & Woods on New York Mortgage Trust, InvestingPro data reveals a nuanced picture of the company's financial health. As of the last twelve months ending Q4 2023, New York Mortgage Trust has a market capitalization of $561.98 million and a Price to Earnings (P/E) ratio that stands at a negative 6.23, reflecting challenges in profitability. However, the adjusted P/E ratio for the same period shows a more positive figure at 21.82, indicating potential for future earnings growth as analysts anticipate a turnaround in profitability this year.
InvestingPro Tips suggest that while the stock has experienced significant price declines over the past week, month, and three months, with total returns of -11.01%, -13.47%, and -16.46% respectively, it also pays a significant dividend to shareholders, yielding 12.77%. This dividend has been maintained for 21 consecutive years, showcasing the company's commitment to returning value to its investors despite recent volatility. Additionally, two analysts have revised their earnings upwards for the upcoming period, hinting at a more optimistic view of the company's future performance.
For those seeking more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/NYMT. Moreover, readers can utilize the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to exclusive insights that could inform investment decisions.
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