Keefe, Bruyette & Woods Makes Rating Changes To NorthStar Asset Management And NorthStar Realty Finance

Keefe, Bruyette & Woods issued rating changes on NorthStar Asset Management Group, Inc NSAM and NorthStar Realty Finance Corp NRF Tuesday.

NorthStar Asset Management Group, Inc, was upgraded to Outperform and its price target was raised from $20 to $24.

Analysts led by George Bose noted that “NSAM has demonstrated that it has strong core businesses (non-traded REITs and assets at NRF) and is growing in new areas through acquisitions and partnerships.
 
“Further, the lack of leverage and strong free cash flow generation give the company the ability to fund acquisitions without accessing the equity capital markets.

“NSAM reported a beat to us driven by higher NRF base management fees and higher non-traded REIT (NTR) asset management fees than our forecast. We are raising our estimates largely on better profitability and on growth from deals that the company has already announced.”

NorthStar Realty Finance Corp was downgraded to Market Perform based on valuation and the firm maintained a $19 price target

“Most of the major investments, including those in healthcare and hotel properties, had been previously announced,” according to Bose.

The report added that the “company entered into an agreement to acquire Griffin-American for $4 billion. The company also completed the acquisition of a $266 million hotel portfolio, investing $52 million. NRF expects an 18 percent yield on equity on the portfolio.”

NorthStar Realty Finance Corp recently traded at $18.61, down 0.16 percent.

NorthStar Asset Management Group, Inc recently traded at $ 20.85, up 0.63 percent.