Ares Commercial Real Estate: High Yield Is A Red Flag (Downgrade)
Portfolio Pulse from
Ares Commercial Real Estate has been downgraded from 'Buy' to 'Hold' due to its failure to cover dividends with distributable profits in 3Q24, high dividend adjustment risk, and ongoing loan issues. The company's portfolio has shrunk by 15%, leading to a significant drop in profits and negative net income.
December 09, 2024 | 8:45 pm
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NEGATIVE IMPACT
Ares Commercial Real Estate has been downgraded from 'Buy' to 'Hold' due to its inability to cover dividends with distributable profits, high dividend risk, and ongoing loan issues. The company's portfolio has shrunk by 15%, leading to a 72% YoY drop in distributable profits and negative net income.
The downgrade from 'Buy' to 'Hold' reflects significant financial challenges, including a failure to cover dividends with profits, a shrinking portfolio, and a substantial drop in profits. These factors are likely to negatively impact ACRE's stock price in the short term.
CONFIDENCE 100
IMPORTANCE 90
RELEVANCE 100