Starwood Property Trust Q2 profit misses estimates
STWD•Q2 results miss estimates
Starwood Property Trust said second-quarter revenue missed analyst expectations, and adjusted EPS and adjusted net income for the quarter also missed analyst expectations.
| Metric | Beat/Miss | Actual | Consensus Estimate |
|---|---|---|---|
| Q2 Revenue | Miss | $513.67 mln | $521.90 mln (3 Analysts) |
| Q2 Adjusted EPS | Miss | $0.40 | $0.41 (8 Analysts) |
| Q2 Adjusted Net Income | Miss | $151.50 mln | $155.46 mln (6 Analysts) |
| Q2 Net Income | $6.60 mln |
Debt management and analyst coverage
Starwood said $2.1 bln of corporate debt transactions in the quarter extended debt maturity and lowered cost of funds.
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell". The average consensus recommendation for the specialized reits peer group is "buy".
Wall Street's median 12-month price target for Starwood Property Trust Inc (Maryland) is $20.50, about 26.5% above its August 5 closing price of $16.21. The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 10 three months ago.
Capital deployment and asset resolution
The company said it invested $2.5 bln in the second quarter and repurchased $30 mln of shares in the first half.
Starwood expects to resolve nearly $900 mln of underperforming assets by year end or shortly after, aiming to redeploy equity.
The company said real estate fundamentals are improving across most asset classes, aided by lower construction and economic growth, and that it is positioned to continue deploying capital and driving growth across business lines.
