Raymond James analysts reaffirmed an Outperform rating and a $4 price target for Granite Point Mortgage Trust (NYSE:GPMT) following the company’s December 19 update. The reaffirmation highlights the progress made in resolving loan concerns and the potential for improved portfolio performance.
Granite Point’s fourth-quarter dividend remained steady, meeting expectations, and the update revealed significant strides in addressing watch list loans. Three loans were resolved during the quarter, with three more resolutions anticipated in the near future. Additionally, the company repurchased 1.2 million shares during the fourth quarter, enhancing shareholder value.
The updated estimates incorporate these developments, reflecting the positive impact of loan resolutions and share buybacks. The analysts emphasized that the current valuation overly accounts for potential credit concerns in the portfolio, while underestimating the earnings potential once non-accrual assets are addressed.
Granite Point’s progress in managing its portfolio positions it for stronger run-rate earnings and highlights its ability to navigate credit challenges effectively, supporting the Outperform rating.