On Tuesday, Wolfe Research initiated coverage on shares of Ladder Capital Corp (NYSE:LADR), assigning an Outperform rating and setting a price target of $13.00. The new price target suggests a 24% upside potential, inclusive of the dividend yield.
Ladder Capital, an internally managed real estate investment trust (REIT), reported holding assets valued at $5.5 billion as of the end of the first quarter of 2024. The firm is recognized for its strategic focus on senior secured assets and boasts a diversified investment approach that encompasses bridge transitional lending, commercial real estate (CRE) securities, and net lease/other owned CRE assets.
A key aspect that sets Ladder Capital apart from its competitors is its balance sheet management strategy. The company is actively pursuing an investment-grade rating for its unsecured debt, which results in a lower proportion of floating rate debt compared to some mortgage REIT peers. This approach underscores Ladder Capital's commitment to maintaining a strong financial position.
The analyst's positive outlook on Ladder Capital reflects the potential for the company to generate attractive risk-adjusted returns for its investors. The emphasis on senior secured assets is a conservative investment strategy that could appeal to investors seeking stability in the volatile REIT sector.
Ladder Capital's stock performance will continue to be monitored by investors as the company progresses towards its financial goals and strengthens its position in the real estate investment market.
In other recent news, Ladder Capital Corp has made notable strides in recent developments. The company reported strong earnings for the first quarter of 2024, with distributable earnings amounting to $42.3 million, or $0.33 per share. This robust performance resulted in a 10.8% return on equity. In addition, Ladder Capital Corp increased its liquidity to over $1.5 billion while reducing its adjusted leverage to 1.5x.
Furthermore, the company's board of directors approved a quarterly dividend of $0.23 per share for the second quarter of 2024. This dividend is set to be distributed to shareholders of record as of June 28, 2024. The management team also expressed cautious optimism about its ability to navigate the current credit cycle, with the company receiving approximately $400 million in payoffs in their loan and securities portfolio.
Despite challenges in the commercial real estate sector, Ladder Capital Corp remains focused and anticipates an increase in loan closings due to the current steepening yield curve.
InvestingPro Insights
As Wolfe Research highlights the potential of Ladder Capital Corp (NYSE:LADR) with an Outperform rating and a significant upside, InvestingPro data provides a deeper dive into the company's financial health and market performance. With a market capitalization of $1.44 billion and a P/E ratio standing at 14.8, Ladder Capital presents itself as a company with a solid valuation in the market. The company's commitment to dividends is evident, as it has maintained dividend payments for 10 consecutive years, with a current dividend yield of 8.16%, significantly contributing to shareholder returns.
Investors may also find solace in the company's liquidity position, as Ladder Capital's liquid assets surpass its short-term obligations, hinting at financial stability. This is a crucial factor for a real estate investment trust, especially when navigating through uncertain economic landscapes. Moreover, the company's stock price movements are known to be quite volatile, which can be a double-edged sword, offering opportunities for gains while also posing risks. Therefore, investors should consider both the dividend appeal and price volatility when evaluating the stock.
For those considering a deeper analysis, InvestingPro offers additional tips on Ladder Capital, guiding investors through the intricacies of the company's financials and market prospects. By using coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further valuable insights. With 5 more InvestingPro Tips available, investors can gain a comprehensive understanding of Ladder Capital's potential for profitability, which analysts predict will continue this year.
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