Deutsche Bank Securities Inc. analyst George Bahamondes upgraded his ratings on Blackstone Mortgage Trust Inc.'s and Arbor Realty Trust Inc.'s shares to "buy" from "hold," citing their current valuations compared to his target prices.

The analyst's price target for Blackstone Mortgage is $35. He lowered Arbor Realty's stock price target to $11.00 from $11.50.

"Broadly, we believe credit-driven portfolio characteristics, supply-demand dynamics, investment opportunities, and the credit outlook make companies like [Blackstone Mortgage] and [Arbor Realty] well positioned from a dividend coverage and book value perspective," wrote the analyst.