Commercial real estate lender Starwood Property Trust (NYSE: STWD) will be announcing earnings results this Monday before market hours. Here’s what to look for.
Starwood Property Trust missed analysts’ revenue expectations by 20.4% last quarter, reporting revenues of $165.5 million, down 11.2% year on year. It was a slower quarter for the company, with a significant miss of analysts’ revenue estimates and a significant miss of analysts’ net interest income estimates.
Is Starwood Property Trust a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, analysts are expecting Starwood Property Trust’s revenue to decline 12.4% year on year to $159.7 million, a further deceleration from the 7.5% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.44 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Starwood Property Trust has missed Wall Street’s revenue estimates twice over the last two years.
Looking at Starwood Property Trust’s peers in the thrifts & mortgage finance segment, some have already reported their Q3 results, giving us a hint as to what we can expect. PennyMac Financial Services delivered year-on-year revenue growth of 10.6%, beating analysts’ expectations by 9.9%, and Ellington Financial reported revenues up 23.6%, topping estimates by 4.9%. PennyMac Financial Services traded up 7.2% following the results while Ellington Financial’s stock price was unchanged.
Read our full analysis of PennyMac Financial Services’s results here and Ellington Financial’s results here.
Investors in the thrifts & mortgage finance segment have had steady hands going into earnings, with share prices up 1.4% on average over the last month. Starwood Property Trust’s stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $21.86 (compared to the current share price of $18.39).
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