UBS Securities LLC analyst Brock Vandervliet downgraded Tremont Mortgage Trust to "neutral" from "buy" and cut his price target on the stock to $5.00 from $16.00.

Vandervliet said the company's recent, unexpected $30 million common stock offering, while down from an originally contemplated size of $100 million, was unfortunate given its dilutive effects, and he noted that after a slow start in capital deployment, Tremont had begun to gain traction in late 2018 and early 2019.

The analyst added that since the pricing of the offering, Tremont's shares dropped by more than 40%. The pricing also came on the heels of loan book growth to about $180 million and a recent dividend hike to 22 cents per share from 11 cents per share, which Vandervliet does not believe is sustainable.

Vandervliet cut his second-quarter EPS forecast to 18 cents from 22 cents, third-quarter EPS estimate to 17 cents from 28 cents and fourth-quarter EPS expectation to 17 cents from 36 cents.