BrightSpire Capital's shares decline following a downgrade from Barclays.

BrightSpire Capital, a commercial real estate credit REIT, saw its shares decline following a downgrade from Barclays. The company focuses on originating, acquiring, and managing a diversified portfolio of CRE debt investments and net leased properties in the US. Its segments include Senior and Mezzanine Loans and Preferred Equity, Net Leased and Other Real Estate, and Corporate and Other.

BrightSpire Capital (NYSE:BRSP), a commercial real estate credit REIT, experienced a decline in its stock price following a downgrade from Barclays (LON:BARC) on Tuesday. The investment bank reduced its rating from Equalweight to Underweight and lowered its price target from $7.00 to $5.00 [1].

The downgrade is attributed to concerns about the challenging reinvestment backdrop and potential risks to the company’s growth targets, which could pressure dividend coverage. According to Barclays, BrightSpire Capital needs to grow its portfolio from $2.5 billion to over $3 billion to maintain its 16-cent quarterly dividend, and potentially to $3.5 billion or more to increase it [1].

BrightSpire Capital reported its first-quarter 2025 earnings, showing earnings per share (EPS) of $0.16, which fell short of the anticipated $0.18. The company's revenue for the quarter was in line with expectations, totaling $63.66 million [1]. Despite the earnings miss, BrightSpire Capital remains committed to maintaining its dividend and is targeting $1 billion in net portfolio growth.

The company also announced a quarterly dividend of $0.16 per share for the second quarter of 2025 and plans a CLO issuance for the fourth quarter of 2025 to support its growth initiatives. These developments highlight BrightSpire Capital’s ongoing efforts to strengthen its financial position and adapt to market conditions.

References:
[1] https://uk.investing.com/news/analyst-ratings/barclays-downgrades-bright-spire-capital-stock-on-dividend-coverage-risks-93CH-4160190