Diving Deep Into ARCP, Other REITs With A Wall Street Analyst
On March 11, JMP Securities released a research note updating:
- American Realty Capital Properties, Inc. (NASDAQ: ARCP)
- Apollo Commercial Real Estate Finance (NYSE: ARI)
- Columbia Property Trust (NYSE: CXP)
Tale Of The Tape
Notably, ARCP shares are down ~34 percent during the past year due to accounting woes, management shake-ups and ongoing SEC and FBI investigations.
JMP - American Realty (ARCP): Maintains Market Perform
- The big news was that ARCP has named Glenn Rufrano as its new CEO. JMP noted the Rufrano had a reputation as a "straightforward executive… with a history of shareholder value creation."
- JMP expects ARCP shares to trade positively on the news.
- However, JMP also noted that the "Non-Executive Chairman seat remains unoccupied" still represents uncertainty regarding direction.
- JMP noted that ARCP's balance sheet needs repair and that "Rufrano has shown previous acumen on the deleveraging front from his previous REIT management tenure."
- The announcement that two of the five ARCP board members "with deep ties to the previous management regime" are stepping down will help shareholders to gain a voice.
- JMP "remains on the sidelines…awaiting clarity on Rufrano's strategic plan," and maintains AFFO estimates for 2014/2015 of $0.92/$0.91, respectively."
JMP - Apollo CRE (ARI): reiterates Market Outperform
- JMP reiterated its "Market Outperform rating on shares of Apollo Commercial Real Estate Finance with an $18.50 price target based on a required 9.5% dividend yield."
- "On March 5, Apollo CRE priced a follow-on equity offering of 10.0M shares at $17.00, raising estimated net proceeds of $168.0M;" a 24.5% increase, which temporarily lowered leverage.
- JMP reduced its "2015 core EPS estimate to $1.85 from $1.90 and [JMP maintains its] 2016 estimate at $1.95."
- JMP believes "ARI shares represent an exceptional value, trading at 1.02x book value with a dividend yield of 10.5% (compared to a peer median yield of 8.1%), and… potential for a next 12-month total return opportunity of ~21%."
JMP - Columbia Property Trust (CXP): maintains Market Outperform, $27 PT
- JMP adjusted its "estimates on shares of Columbia Property Trust following yesterday's announcement that the company had priced $350M of 10-year senior notes."
- JMP pointed out that CXP "stock is cheap at 13.5x 2015 FFO (compared to the sector average of ~18x)."
- JMP's $27 PT is "derived from a blend of [its] NAV estimate ($25.50) and a 15x multiple ($28.80)."
- "The new debt is slightly dilutive to 2015 FFO/share… [JMP's] estimate declines from $1.92 to $1.89, due mostly to the timing of capital deployment, while [JMP's] 2016 FFO/share estimate decreases by a penny to $1.83."
- Columbia's "portfolio quality and location should improve materially following the next tranche of planned asset sales, which concludes the portfolio repositioning strategy."
Image credit: MarshalM20, Wikimedia
Latest Ratings for ARCP
Date | Firm | Action | From | To |
---|---|---|---|---|
Mar 2015 | Capital One Financial | Upgrades | Equal-Weight | Overweight |
Mar 2015 | Stifel Nicolaus | Assumes | Hold | |
Mar 2015 | JMP Securities | Initiates Coverage on | Market Perform |
View More Analyst Ratings for ARCP
View the Latest Analyst Ratings
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