Wells Fargo analyst Donald Fandetti reiterated a Buy rating on Starwood Property (STWD – Research Report) yesterday and set a price target of $24.00.
Donald Fandetti has given his Buy rating due to a combination of factors that highlight Starwood Property’s strategic positioning and financial health. The company has adopted an aggressive approach in its diversified business lines, maintaining low leverage while showcasing a robust pipeline. Their commercial real estate credit remains stable, and they offer an attractive dividend yield of 9.5%, which adds to the stock’s appeal.
Starwood Property’s financial performance in the fourth quarter exceeded expectations, with distributable earnings surpassing estimates. The company has made strategic moves to extend the duration of its debt, further strengthening its financial position. Despite a slight decline in their commercial real estate loan portfolio, other segments like infrastructure loans and special servicing have shown growth, contributing to higher fee income. These factors, combined with the company’s diversified asset approach, position Starwood as a finance company within a REIT structure, making it an attractive investment opportunity.