Starwood Property Trust STWD is scheduled to report fourth-quarter 2024 results on Feb. 27, before the opening bell. The company’s results will likely reflect year-over-year declines in earnings and revenues in the to-be-reported quarter.

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In the last reported quarter, the mortgage real estate investment trust (mREIT), focused on commercial property mortgages and commercial real estate, posted distributable earnings of 48 cents, surpassing the Zacks Consensus Estimate of 46 cents.

Over the trailing four quarters, the company outpaced the Zacks Consensus Estimate for earnings on one occasion and missed in the other three. On average, it delivered a surprise of 13.36% during this period.

STARWOOD PROPERTY TRUST, INC. Price and EPS Surprise

Let us see how things have shaped up prior to this announcement.

Factors at Play for STWD in Q4

The mREIT sector was under pressure in the fourth quarter due to high volatility in the fixed-income markets. Nonetheless, a positively sloped yield curve is anticipated to have supported mortgage REIT’s valuations. The yield curve steepened and then normalized in the quarter.

With this, agency mortgage REITs are likely to have witnessed a tangible book value increase as spreads on benchmark indices have tightened in the quarter. This is likely to have increased STWD’s book value per share in the quarter to be reported.

However, the U.S. commercial real estate market continued to be affected by the deterioration in the office real estate space. Also, the commercial MBS delinquency rate increased in the fourth quarter. This is expected to have affected STWD’s performance in the to-be-reported quarter.

The Zacks Consensus Estimate for fourth-quarter 2024 rental revenues is pegged at $27.26 million, suggesting a 9.1% year-over-year fall.

Also, the company’s activities during the quarter were inadequate in gaining analyst confidence. Overall, The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $472 million, suggesting a 9.6% year-over-year decline.  

The Zacks Consensus Estimate for fourth-quarter 2024 EPS has been unchanged at 46 cents per share over the past seven days. The estimate indicates a year-over-year fall of 20.7%.

What Our Quantitative Model Predicts for STWD

Starwood Property does not have the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Starwood Property is 0.00%.

Zacks Rank: Starwood Property currently carries a Zacks Rank of 4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other mREITs

Annaly Capital Management, Inc. NLY reported fourth-quarter 2024 adjusted earnings available for distribution per average share of 72 cents, which beat the Zacks Consensus Estimate of 67 cents. The figure increased from 68 cents in the year-ago quarter.

NLY recorded a year-over-year decline in book value per share. Nonetheless, the company’s average yield on interest-earning assets improved in the reported quarter.

AGNC Investment Corp.’s AGNC fourth-quarter 2024 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 37 cents missed the Zacks Consensus Estimate of 42 cents. Also, the bottom line declined from 60 cents in the year-ago quarter.

AGNC's net interest income was $115 million against net interest expenses of $26 million in the prior-year quarter. The metric missed the Zacks Consensus Estimate by 23.7%.

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AGNC Investment Corp. (AGNC) : Free Stock Analysis Report

STARWOOD PROPERTY TRUST, INC. (STWD) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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