Shares of the Granite Point Mortgage Trust Inc. (GPMT) jumped over 4% in Monday’s extended trading session despite the real estate investment trust reporting lower-than-expected Q2 earnings.
Granite Point provided an update on its activities after the quarter-end. The company has a forward pipeline of senior commercial real estate loans, with total commitments of more than $280 million and initial fundings of over $265 million. Furthermore, the company said that the fundings have either closed or are in the closing stages.
GPMT reported distributable earnings of $0.29 per share, two cents short of analysts’ expectations of $0.31 per share. The company reported distributable earnings of $0.38 per share in the prior-year period.
Granite Point CEO Jack Taylor commented, “With the closing of our third CRE CLO during the quarter, at an attractive cost of funds and leverage, we have further optimized our financing of our portfolio and have increased our non-mark-to-market borrowings to about 75%.”
He further added, “We closed on over $200 million of new loan commitments during the quarter, currently have an additional $280 million either closed or are expected to close in the near term, and, with the combination of our liquidity and our highly experienced origination team, we intend to expand our strong forward pipeline.”
During the second quarter, the company closed seven loans with $203.8 million in total commitments, and $163.4 million of initial fundings. (See Granite Point Mortgage stock charts on TipRanks)
Providing details on its well-diversified portfolio, the company said that it comprised 100% of loans, with an outstanding principal balance of $3.6 billion and total commitments of $4.1 billion. Furthermore, 99% of the portfolio is comprised of senior first mortgages, with over 98% being floating rate loans.
JMP Securities analyst Steven Delaney recently increased the price target from $14 to $15 and reiterated a Buy rating on the stock.
Consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average Granite Point Mortgage price target of $15 implies 8.1% upside potential to current levels.
GPMT scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.