Nomura Securities Downgrades Great Ajax Corp. (AJX) to Neutral

November 10, 2016 6:52 AM EST
Get Alerts AJX Hot Sheet
Price: $13.20 +1.07%

Rating Summary:
    5 Buy, 1 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Nomura Securities downgraded Great Ajax Corp. (NYSE: AJX) from Buy to Neutral with a price target of $14.50 (from $16.00).

Analyst Brock Vandervliet commented, "We are downgrading our investment rating on Great Ajax from Buy to Neutral, reducing our TP from $16 to $14.50 and reducing our earnings estimates. Reasons behind the move include: One, we are reducing earnings projections materially in line with the implications of the Q3 print. Revisions include Q4 moving to $0.46 from $0.61, and 2017 moving to $2.14 from $2.38, previously. We do not believe Street estimates are updated post-Q3 but are $0.57 and $2.42, respectively. Two, as part of the lower earnings, AJX has not ramped its dividend as we had expected. While we maintain a roughly 60% payout ratio, our 2017 dividend assumption moves down from $1.34 to $1.15. Three, we are concerned about the continued potential for a dilutive capital raise, with one earlier in the year and a recently announced $50Mn “ATM” (At the Market Issuance) offering. We believe that coupled with the lower earnings, the stock is likely capped below book value."

For an analyst ratings summary and ratings history on Great Ajax Corp. click here. For more ratings news on Great Ajax Corp. click here.

Shares of Great Ajax Corp. closed at $13.57 yesterday.

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