Analysts’ Top Financial Picks: SLD, FCH

By Austin Angelo

Analysts fell to the sidelines weighing in on Sutherland Asset Management Corporation (NYSE: SLD) and Felcor Lodging Trust (NYSE: FCH) with neutral ratings,indicating that the experts are neither bullish nor bearish on the stocks.

Sutherland Asset Management Corporation (NYSE: SLD)

FBR Capital analyst Jessica Levi-Ribner reiterated a Hold rating on Sutherland Asset Management Corporation (NYSE: SLD) on May 12 and set a price target of $14. The company’s shares opened today at $14.50.

Levi-Ribner wrote:

“We reiterate our Market Perform rating and $14.00 price target on shares of SLD following 1Q17 earnings that came up a bit short of our expectations. SLD reported core EPS of $0.33, missing our $0.35 estimate and coming in below the quarterly dividend of $0.37. Core ROE dropped 50 bps QOQ to 7.9% as levered yields across the portfolio declined. With that said, the company has been running cash- heavy but expects to deploy more capital over the coming quarters given a robust loan origination/acquisition pipeline, which should benefit ROEs. Reflecting the $75M secured note offering completed in the quarter and the three securitizations that the company intends to execute on in 2017, we believe Sutherland should have plenty of dry powder to ramp investment. We would look to become more constructive on the shares upon further progress on capital deployment and EPS growth but maintain a more neutral view until the company demonstrates its ability to execute on these initiatives.”

According to TipRanks.com, Levi-Ribner is a 4-star analyst with an average return of 8.5% and a 71.6% success rate. Levi-Ribner covers the Financial sector, focusing on stocks such as Arlington Asset Investment, New York Mortgage Trust, and Starwood Property Trust.

Sutherland Asset Management Corporation has an analyst consensus of Hold, with a price target consensus of $14.

Felcor Lodging Trust (NYSE: FCH)

FBR Capital analyst Bryan Maher reiterated a Hold rating on Felcor Lodging Trust (NYSE: FCH) on May 12 and set a price target of $8. The company’s shares opened today at $6.91.

Maher observed:

“FelCor Lodging Trust reported 1Q17 results that were a solid miss to estimates as RevPAR declined 1.3%. However, this was somewhat irrelevant as FelCor has agreed to be acquired by RLJ Lodging Trust in an all-stock deal that initially valued FelCor at $8.50 share, although with the sell-off in RLJ stock is now worth only $7.33/share at last night’s close. Interestingly, FelCor opted not to host an earnings conference call and, instead, issued some quarterly highlights to analysts via e-mail. We continue to believe that Ashford Trust’s ~50% cash offer (~50% stock) was a solid one that FelCor seemed intent to pass on. Ashford has subsequently withdrawn its offer (which would currently be worth $7.99/share) and has moved on to other things. Likely the right move. We think FelCor shares will now trade range-bound and in relative lockstep with RLJ until the deal closes sometime in 4Q17. Just in case that does not happen for some reason—as several FelCor shareholders have expressed their frustration with the deal terms—we are updating our FelCor standalone earnings estimates and maintaining our Market Perform rating on FelCor shares.”

According to TipRanks.com, Maher is a 2-star analyst with an average return of 0.2% and a 50.9% success rate. Maher covers the Financial sector, focusing on stocks such as Government Properties Income Trust, Senior Housing Properties Trust, and Retail Opportunity Investments.

Felcor Lodging Trust has an analyst consensus of Hold, with a price target consensus of $8.

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