Bright Spire Capital (BRSP) PT Lowered to $6 at B.Riley

B.Riley analyst Timothy D\'Agostino lowered the price target on Bright Spire Capital (NYSE: BRSP) to $6.00 (from $6.50) while maintaining a Buy rating.

The analyst comments "We return to BrightSpire Capital (BRSP — Buy, $6 PT) following the 3Q26 earnings call on October 28. After the call, we see the previous management outlook for the loan portfolio size being $3.5B at YE26 and $4.0B by halfway through 2027 as no longer feasible. However, given lower repayments paired with investment activity that may be less than previously anticipated, we expect net positive deployment in the quarters ahead. Alongside this, we view the closing of BRSP 2026-FL4 as positive, as its S+1.54% is lower than FL3's S+1.69%. On the earnings call, management provided additional detail on the pacing of new CLOs, noting one more in 2027, bringing the total to three outstanding. With our updated estimates, we are lowering our forecasted loan portfolio at 4Q26E and 2Q27E from $3.5B and $4.0B to ~$3.2B and ~ $3.6B, respectively. As we lower our loan portfolio estimates, we also take in our ADE/sh. estimate for 4Q26E and 2027E from $0.15 and $0.67 to $0.13 and $0.60. With our assumption of slower portfolio growth, dividend coverage being pushed out into 2H27, and the potential for continued delays in capital rotation, we are maintaining our Buy rating and lowering our PT from $6.50 to $6.00, based on a decrease in our assigned P/BV multiple from 0.95x to 0.85x on BVPS. However, if capital is rotated out of underperforming assets at a faster pace than our forecast, dividend coverage could come into view earlier than our model indicates."

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