Starwood Property Trust (NYSE:STWD) Rating Increased to Strong-Buy at UBS Group

Key Points

• UBS Group upgraded Starwood Property Trust to a “strong-buy” rating, even as other analysts remain mixed on the stock. The overall consensus from MarketBeat is still a “Moderate Buy” with a $19.70 price target.
• STWD shares were down 1.1% and opened at $16.91, near their 52-week low of $16.78. The stock also trades below its 50-day and 200-day moving averages, signaling recent weakness.
• Recent financial results were weaker than expected, with Q1 EPS of $0.39 missing estimates and revenue of $205.55 million far below analyst expectations. The company also authorized a $400 million share repurchase plan, which may signal management believes the stock is undervalued.

Starwood Property Trust (NYSE:STWD - Get Free Report) was upgraded by stock analysts at UBS Group to a "strong-buy" rating in a report issued on Tuesday,Zacks.com reports.

Several other equities research analysts have also recently commented on the company. Wells Fargo & Company lowered their price target on Starwood Property Trust from $22.00 to $21.00 and set an "outperform" rating for the company in a research note on Thursday, February 26th. Zacks Research cut Starwood Property Trust from a "hold" rating to a "strong sell" rating in a research note on Wednesday, May 27th. Weiss Ratings cut Starwood Property Trust from a "hold (c)" rating to a "hold (c-)" rating in a research note on Monday, May 11th. Keefe, Bruyette & Woods lowered their price target on Starwood Property Trust from $20.00 to $19.50 and set an "outperform" rating for the company in a research note on Wednesday, May 13th. Finally, JPMorgan Chase & Co. lowered their price target on Starwood Property Trust from $20.00 to $19.00 and set an "overweight" rating for the company in a research note on Thursday, April 16th. One analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus price target of $19.70.

Starwood Property Trust Trading Down 1.1%

NYSE:STWD opened at $16.91 on Tuesday. The company has a debt-to-equity ratio of 3.31, a current ratio of 1.57 and a quick ratio of 1.57. Starwood Property Trust has a fifty-two week low of $16.78 and a fifty-two week high of $21.05. The stock's 50-day moving average is $17.56 and its two-hundred day moving average is $17.92. The stock has a market cap of $6.27 billion, a PE ratio of 17.62, a price-to-earnings-growth ratio of 2.41 and a beta of 0.98.

Starwood Property Trust (NYSE:STWD - Get Free Report) last released its earnings results on Friday, May 8th. The real estate investment trust reported $0.39 earnings per share for the quarter, missing the consensus estimate of $0.42 by ($0.03). Starwood Property Trust had a net margin of 18.11% and a return on equity of 7.91%. The business had revenue of $205.55 million for the quarter, compared to analysts' expectations of $496.25 million. During the same period last year, the firm earned $0.45 EPS. The company's revenue was up 22.5% compared to the same quarter last year. As a group, equities research analysts forecast that Starwood Property Trust will post 1.57 earnings per share for the current fiscal year.

Starwood Property Trust declared that its Board of Directors has approved a share repurchase plan on Thursday, February 26th that permits the company to repurchase $400.00 million in shares. This repurchase authorization permits the real estate investment trust to purchase up to 6.1% of its stock through open market purchases. Stock repurchase plans are usually a sign that the company's management believes its stock is undervalued.

Insider Activity at Starwood Property Trust

In related news, Director Jeffrey G. Dishner sold 7,013 shares of the company's stock in a transaction on Wednesday, April 1st. The stock was sold at an average price of $17.13, for a total value of $120,132.69. Following the completion of the transaction, the director directly owned 168,152 shares in the company, valued at approximately $2,880,443.76. This represents a 4.00% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Insiders own 5.80% of the company's stock.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of the company. Norris Financial Group LLC acquired a new position in shares of Starwood Property Trust in the first quarter valued at $280,000. Western Wealth Management LLC acquired a new position in shares of Starwood Property Trust in the first quarter valued at $74,000. Centaurus Financial Inc. raised its stake in shares of Starwood Property Trust by 4.9% in the first quarter. Centaurus Financial Inc. now owns 265,990 shares of the real estate investment trust's stock valued at $4,580,000 after purchasing an additional 12,356 shares in the last quarter. Sunbelt Securities Inc. raised its stake in shares of Starwood Property Trust by 32.4% in the first quarter. Sunbelt Securities Inc. now owns 82,768 shares of the real estate investment trust's stock valued at $1,425,000 after purchasing an additional 20,240 shares in the last quarter. Finally, Amundi raised its stake in shares of Starwood Property Trust by 67.7% in the first quarter. Amundi now owns 34,743 shares of the real estate investment trust's stock valued at $598,000 after purchasing an additional 14,021 shares in the last quarter. 49.82% of the stock is currently owned by institutional investors and hedge funds.

Starwood Property Trust Company Profile

Starwood Property Trust NYSE: STWD is a publicly traded real estate investment trust that specializes in originating, acquiring and managing commercial mortgage loans and other real estate-related investments. The company's portfolio spans a variety of asset classes, including senior mortgages, mezzanine debt, preferred equity and direct equity investments in commercial properties. By focusing on both debt and equity capital solutions, Starwood Property Trust seeks to generate attractive risk-adjusted returns for its shareholders through a combination of current income and capital appreciation.

Operating primarily in the United States, Starwood Property Trust deploys capital across a broad range of property types, such as multifamily residential, office, retail, hotel and industrial.

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