Stock Price & Analysis

Based on Starwood Property Trust's recent earnings and strategic investments, the stock shows potential for growth due to its increased investment pace and involvement in high-demand sectors like AI infrastructure. However, the slight revenue decline suggests caution. Hold or buy for long-term growth.

The price target for STWD stock in 2025 is expected to range between $19.50 and $22. This prediction is based on analyst estimates, with JP Morgan setting a target of $19.50 and Keefe, Bruyette & Woods targeting $22. The stock's current price of $20.39, combined with its neutral RSI of 59.11 and slightly positive MACD, suggests stability. Recent earnings and strategic investments, such as the $2B data center loan, support this outlook.

The S1 support level for STWD Stock is $19.64 ,The R1 resistant level for STWD Stock is $20.64.

As of the end of day on 2025-03-14, the price of STWD Stock was $19.95.

The target price for STWD Stock according to analyst rating is 21.90, with the highest price target at 24.00 and the lowest at 19.50. Analysts have a Strong Buy rating on STWD Stock overall.

The market cap of STWD is $6.7B.

Analysis and Insights

Valuation Metrics

STWD's valuation metrics suggest potential overvaluation. The stock's price-to-earnings (P/E) ratio of 17.24 is higher than the industry average, indicating elevated valuations. Similarly, the EV/EBITDA ratio of 8.96 is above historical norms for mortgage REITs, further signaling overvaluation.

Financial Performance

The company's Q4 distributable earnings of $0.48 per share slightly exceeded expectations, but total revenue of $454.4M fell short of estimates and declined from the previous quarter. This mixed performance raises concerns about growth sustainability.

Dividend Yield and Risk

STWD offers a high dividend yield of 9.09%, which is attractive for income-focused investors. However, the high yield may reflect market concerns about the stock's growth prospects and valuation.

Analyst Sentiment

Analysts maintain a cautious stance, with JP Morgan lowering its price target to $19.50, citing risks from higher interest rates and commercial real estate challenges. This aligns with broader market concerns about the sector.

Recent Developments

STWD's participation in a $2B construction loan for a Utah data center highlights its ability to secure large investments. However, the company's high debt levels and sensitivity to interest rate changes remain significant risks.

Conclusion

STWD appears overvalued based on its high valuation metrics, mixed financial performance, and analyst caution. While its dividend yield is attractive, investors should exercise caution due to risks tied to interest rates and commercial real estate trends.

Starwood Property Trust, Inc. is a real estate investment trust. The Company's segments include Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing. Commercial and Residential Lending segment is engaged in originating, acquiring, financing and managing commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities, residential mortgage-backed securities and other real estate and real estate-related debt investments in the United States, Europe and Australia. Infrastructure Lending segment is engaged in originating, acquiring, financing and managing infrastructure debt investments. Property segment is engaged primarily in acquiring and managing equity interests in stabilized commercial real estate properties. Investing and Servicing segment includes a servicing business in the United States; an investment business, and a mortgage loan business.

STWD stock is predicted to reach approximately $35 by 2030, driven by its diversified portfolio and strong management in the real estate and infrastructure sectors. The company's consistent dividend payments and large capital deployment suggest sustained growth.

STWD has a total of 293 employees.