Citizens cuts Bright Spire Capital stock price target on rate concerns

Citizens, a financial services firm, has reduced its price target for Bright Spire Capital stock to $6.00 from $7.00. The firm maintains a Market Outperform rating and notes that the new target represents 0.74 times undepreciated book value, down from 0.85 times previously. Despite the lower target, Citizens still rates Bright Spire Capital as a Buy.

The company's stock is currently trading at $3.79, near its 52-week low of $3.73, and has a price-to-book ratio of 0.56. Bright Spire Capital has been shifting capital from legacy real estate investments to its core senior lending strategy, with positive net loan deployment beginning the third quarter. Management has been actively buying back shares, and the company offers a 16.89% dividend yield.

The price target adjustment is due to Citizens' expectation that credit loss reserves will increase as interest rates shift at both short and long ends. The firm predicts that short-term rate hikes will put pressure on existing borrowers, while long-term rate increases will impact property valuations. This adjustment comes as Citizens prepares to analyze the company's filed Form 10-Q and update its financial model.

Recently, Bright Spire Capital reported weaker-than-expected earnings for Q2 2026, posting $0.13 per share in adjusted distributable earnings compared to the expected $0.15 per share. Revenue also fell short, reporting $55.4 million against the forecasted $63.88 million. However, the company highlighted stronger core earnings and active loan growth.

Additionally, Bright Spire Capital completed a $300 million sale of two industrial real estate properties in Arizona and California, which involved subsidiaries CLNC NNN Alberts AZ, LLC and CLNC NNN Alberts CA, LLC.