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Starwood Property Trust (STWD) Outpaces Stock Market Gains: What You Should Know

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Starwood Property Trust (STWD - Free Report) closed the most recent trading day at $17, moving +1.55% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.89%. Meanwhile, the Dow gained 1.2%, and the Nasdaq, a tech-heavy index, lost 0.68%.

Prior to today's trading, shares of the commercial real estate investment trust had lost 17.25% over the past month. This has lagged the Finance sector's loss of 11.27% and the S&P 500's loss of 3.9% in that time.

Starwood Property Trust will be looking to display strength as it nears its next earnings release. In that report, analysts expect Starwood Property Trust to post earnings of $0.49 per share. This would mark a year-over-year decline of 35.53%. Meanwhile, our latest consensus estimate is calling for revenue of $500 million, up 70.07% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.02 per share and revenue of $2.07 billion. These totals would mark changes of -11.4% and +41.32%, respectively, from last year.

Any recent changes to analyst estimates for Starwood Property Trust should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 3.04% lower within the past month. Starwood Property Trust is currently a Zacks Rank #4 (Sell).

Valuation is also important, so investors should note that Starwood Property Trust has a Forward P/E ratio of 8.29 right now. For comparison, its industry has an average Forward P/E of 6.57, which means Starwood Property Trust is trading at a premium to the group.

The REIT and Equity Trust industry is part of the Finance sector. This group has a Zacks Industry Rank of 155, putting it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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