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Compass Point Starts Starwood Property Trust (STWD) at Buy; Spinoff Creates Valuation Catalyst

January 22, 2014 10:45 AM EST Send to a Friend
Get Alerts STWD Hot Sheet
Price: $24.01 +1.35%

Rating Summary:
    6 Buy, 0 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 20 | Down: 9 | New: 24
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Compass Point initiates coverage on Starwood Property Trust (NYSE: STWD) with a Buy. PT $34.50.

"The spinoff of the single-family rental (SFR) segment into a separately traded public company will provide investors with the opportunity to purchase STWD (and potentially STWD WI) at a discount to its intrinsic value of $34.50 (pre-spin). STWD shares have +19.5% upside to our price target, and we anticipate a total return of +27.0% included our base case 7.5% dividend yield.

The second catalyst for STWD is the potential for an an increase in the company's dividend paying capacity due to the movement of LNR commercial mortgage servicing assets from a taxable REIT subsidiary (TRS) to a qualified REIT subsidiary (QRS).

For an analyst ratings summary and ratings history on Starwood Property Trust click here. For more ratings news on Starwood Property Trust click here.

Shares of Starwood Property Trust closed at $29.14 yesterday.




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