FBR Capital Starts NorthStar Asset Management (NSAM) at Outperform

FBR Capital initiates coverage on NorthStar Asset Management (NYSE: NSAM) with a Outperform rating and a price target of $21.00.

Analyst Daniel Altscher comments, "NSAM has a unique business model, and with very few competitors having a similar profile, we think
the stock will command a premium valuation multiple given the high scarcity value. Plus, NSAM offers investors a robust annual recurring cash flow stream at day one, which basically cannot go down, only go up, making this a "star right from the start." Further, NSAM has significant flexibility in terms of growing its cash flow stream through a variety of different optionality outcomes, which we do not currently
include in our estimates, giving way to an upside runway. Putting it all together, we see NSAM as having the capability to achieve both substantial earnings growth and multiple expansion, on top of the fact that we expect nearly all of earnings to be returned to shareholders through dividends (we model a 2% dividend yield off our 2015E numbers), stock buybacks, or M&A as the company is balance sheet light/fee heavy. To truly appreciate the broader vision and possibility that is NSAM, investors need to understand NorthStar Realty Finance (NRF – Outperform). But for those who do, we think the opportunity is tremendous."

For an analyst ratings summary and ratings history on NorthStar Asset Management click here. For more ratings news on NorthStar Asset Management click here.

Shares of NorthStar Asset Management closed at $19.80 yesterday.

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