BofA lowered the firm's price target on Starwood Property to $19 from $20 and keeps a Neutral rating on the shares. The firm notes Starwood Property reported a decent quarter, although dilution from the FIP acquisition and excess liquidity continue to weigh on near-term earnings. Credit was mixed due to REO impairments and negative credit migration from a small number of loans. However, origination volume across Starwood's various lending segments remains solid. BofA thinks Starwood is the best positioned CRE mREIT to navigate the current macro backdrop due to its multi-cylinder platform and DEPS should near the quarterly dividend in the second half of 2026. That said, the firm believes risk/reward is balanced.
