Market Overview

UPDATE: JMP Securities Reiterates On Ares Commercial Real Estate On Near-Term Earnings Drag

Related ACRE
Benzinga's Top Upgrades, Downgrades For October 9, 2018
FBR Upgrades Ares Commercial's 'Show Me Story'
A Top Commercial Mortgage REIT Pick That Yields 8.9% (Seeking Alpha)

In a report published Monday, JMP Securities analyst Steven C. DeLaney reiterated a Market Outperform rating on Ares Commercial Real Estate Corp. (NYSE: ACRE), but lowered the price target from $15.00 to $14.50.

In the report, JMP Securities noted, “Net interest income increased by 17%, to $10.1M from $8.6M in 4Q13, but the taxable multifamily subsidiary, ACRE Capital LLC, reported a net loss of $576K, or $0.02 per share. The multi-family unit was acquired in August 2013 and has been restructured and relocated in recent months as 10 new multi-family loan originators have been hired, leading management to suggest on the 1Q14 earnings call that the contribution from this unit would improve in 2H14. Given the near-term drag to earnings from ACRE Capital and slightly lower assumed capital formation activity, we reduce our 2014/2015 core EPS estimates to $0.90/$1.15 from $0.95/$1.20, compared to current consensus estimates reported by SNL Financial of $0.92/$1.18.

"In addition, we lower our 12-month price target from $15.00 to $14.50 (supported by an implied yield of 7.5% on our projected 1H15 quarterly dividend rate of $0.27) (prior basis 7.75%/2Q15 dividend of $0.29) given our lower earnings forecast and the fact that ACRE shares have declined 6.9% thus far in 2Q14 compared to an average loss of 2.1% for the commercial MREIT peer group and a gain of 0.3% in the S&P 500. We continue to view ACRE shares as one of the best values in the mortgage REIT space and, in our view, a potential 12-month total return opportunity of ~25% comfortably warrants our continued Market Outperform rating.”

Ares Commercial Real Estate closed on Friday at $12.49.

Latest Ratings for ACRE

Oct 2018BTIG ResearchInitiates Coverage OnBuy
Aug 2018Credit SuisseMaintainsNeutralNeutral
Jul 2018JMP SecuritiesMaintainsMarket OutperformMarket Outperform

View More Analyst Ratings for ACRE
View the Latest Analyst Ratings

Posted-In: JMP Securities Steven C. DeLaneyAnalyst Color Price Target Analyst Ratings


Related Articles (ACRE)

View Comments and Join the Discussion!
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

UPDATE: JMP Securities Reiterates On Navidea Biopharmaceuticals On Pipeline Restructuring

Benzinga's Top #PreMarket Losers