On Tuesday, Keefe, Bruyette & Woods adjusted its stock price target for Nexpoint Real Estate (NYSE:NREF) to $13.50, down from the previous $14.00, but kept its Market Perform rating for the stock. The adjustment comes after Nexpoint Real Estate provided guidance that influenced the firm's earnings projections.
The firm has revised its second-quarter 2024 earnings per share (EPS) estimate for Nexpoint Real Estate to $0.45 and the full-year 2024 EPS to $0.99. The forecast for the third quarter of 2024 through to 2025 remains unchanged. This revision follows Nexpoint's expectation of an economic adjusted debt (EAD) of $0.40 to $0.50 and a cash available for distribution (CAD) of $0.35 to $0.45 for the second quarter of 2024.
The updated guidance by Nexpoint Real Estate is attributed to the timing of capital deployment, which has been affected by the repayment of a large single-family rental loan. This repayment has had a direct impact on the company's financial projections and, consequently, the firm's assessment of Nexpoint's stock.
Keefe, Bruyette & Woods noted that despite the stock price target reduction, Nexpoint Real Estate shares hold modest appeal, trading at 0.8 times book value with a notable 15% yield. The firm's continued Market Perform rating reflects a balanced view of the risks and rewards associated with Nexpoint Real Estate's stock, suggesting that the firm sees neither significant upside nor downside potential at this time.
InvestingPro Insights
Keefe, Bruyette & Woods' recent analysis of Nexpoint Real Estate aligns with some of the insights available from InvestingPro. Notably, Nexpoint Real Estate has a history of rewarding shareholders, having raised its dividend for four consecutive years.
This is significant as it showcases the company's commitment to returning value to its investors, even amidst financial adjustments and market fluctuations. The current dividend yield stands at an impressive 18.02%, making it a noteworthy consideration for income-focused investors.
On the financial health front, Nexpoint Real Estate's liquid assets exceed its short-term obligations, indicating a robust balance sheet capable of weathering short-term market volatility. This aligns with the firm's Market Perform rating, suggesting stability in the company's financial positioning. However, it's important to note that the company was not profitable over the last twelve months, but analysts are optimistic, predicting profitability for the year ahead.
Investors considering Nexpoint Real Estate can also benefit from additional insights available on InvestingPro. There are currently 7 more InvestingPro Tips for Nexpoint Real Estate, which can provide a deeper understanding of the company's potential. For those interested in exploring these further, InvestingPro offers a comprehensive analysis, and readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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