Raymond James Downgrades Arbor Realty Trust (ABR) to Market Perform

Raymond James analyst Stephen Laws downgraded Arbor Realty Trust (NYSE: ABR) from Outperform to Market Perform.

The analyst comments: "We are updating our estimates and downgrading our rating on Arbor Realty Trust (ABR) to Market Perform (from Outperform) after reviewing the 4Q results and Form 10-Q. The increase in interest rates and the higher-for-longer rate outlook has created headwinds for ABR’s business, such as 1) the need for additional loan modifications to manage through problem loans, 2) lower new originations, 3) lower agency volumes, and 4) increasing REO activity, which will be a drag on earnings over the next 12-24 months. Given these headwinds, we are reducing our estimates and expect the dividend to be reduced to $0.28/share in 1Q. We expect distributable earnings to trough in 1H25, with distributable earnings ex losses to begin recovering in 2H25 as resolutions occur and new investment activity increases. With shares trading roughly in-line with year-end book value and roughly in line with our SOTP base case, we believe the current valuation appropriately balances the near-term headwinds with the longer-term earnings potential of the platform. Given the higher rate outlook and balanced valuation, we believe our new rating is appropriate."

For an analyst ratings summary and ratings history on Arbor Realty Trust click here. For more ratings news on Arbor Realty Trust click here.

Shares of Arbor Realty Trust closed at $12.00 yesterday.

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