On Friday, BTIG initiated coverage on shares of Ladder Capital Corp (NYSE:LADR), assigning a Buy rating and setting a price target of $13.50. The firm's outlook suggests a one-year forward total return of 19.1%, including the current 7.6% dividend yield.
Ladder Capital, a real estate investment trust, has garnered attention for aligning with BTIG's core commercial mortgage REIT investment thesis. The firm emphasizes the importance of investing in companies that have effectively managed problematic loans and are poised for proactive growth strategies.
The analyst highlighted Ladder Capital's diverse investment opportunities across loans, securities, and direct real estate as a key factor. Moreover, the company's robust financial position, characterized by a cash balance exceeding $1.2 billion—which accounts for 79% of its market capitalization—was noted as a strong foundation for future investment ventures and potential dividend increases.
Ladder Capital's financial health is further supported by a limited amount of non-accrual loans, which represent a mere 2.6% of its unpaid principal balance (UPB). This positions the company well for pursuing new investment opportunities while maintaining its commitment to shareholder returns.
The new price target of $13.50, up from the previous target, reflects a confidence in Ladder Capital's strategic initiatives and its capacity to deliver shareholder value through both capital appreciation and a consistent dividend.
In other recent news, Ladder Capital Corp reported strong earnings and revenue results for the first quarter of 2024, with distributable earnings of $42.3 million, or $0.33 per share, marking a robust 10.8% return on equity. The company also successfully increased its liquidity to over $1.5 billion while reducing its adjusted leverage to 1.5x.
Another significant development was Wolfe Research initiating coverage on Ladder Capital, assigning an Outperform rating and setting a price target of $13.00, indicating a potential 24% upside.
The company has also been active in its financial management, pursuing an investment-grade rating for its unsecured debt, which could lower the proportion of floating rate debt. In addition, Ladder Capital's board of directors approved a quarterly dividend of $0.23 per share for the second quarter of 2024, set to be distributed to shareholders of record as of June 28, 2024.
Despite facing challenges in the commercial real estate sector, Ladder Capital remains focused and anticipates an increase in loan closings due to the current steepening yield curve.
InvestingPro Insights
As Ladder Capital Corp (NYSE:LADR) receives a favorable outlook from BTIG, real-time data from InvestingPro complements this perspective. LADR's market capitalization stands at $1.55 billion, with a solid P/E ratio of 15.81, indicating that the stock might be reasonably valued in the context of its earnings. The company's P/E ratio has adjusted slightly higher in the last twelve months as of Q1 2024, to 16.5, reflecting changes in earnings or investor sentiment.
An InvestingPro Tip highlights the significance of LADR's dividend, which is a substantial part of the investment thesis, with a current yield of 7.61%. This is underpinned by LADR's decade-long history of maintaining dividend payments. Additionally, the company's stock price has been quite dynamic, currently trading near its 52-week high, and has shown a strong return of 17.76% over the last three months.
For those considering capitalizing on Ladder Capital's growth and dividend strategy, it's worth noting that there are 7 additional InvestingPro Tips available, which can be accessed by visiting the InvestingPro platform. For a deeper dive into these insights, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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