Stephen Laws of Raymond James upgraded Ares Commercial Real Estate Corp.'s stock rating to "strong buy 1" from "outperform 2," with a price target of $15.50.
The analyst wrote that the upgrade is based on the new Ares warehouse facility, which is expected to reduce time between repayments and capital reinvestment. The upgrade also considers recent portfolio activity.
Laws believes that having a number of identified investments should allow Ares Commercial to keep more capital deployed and reduce cash drag, which should benefit net core earnings.
His EPS estimates for the company are $1.37 for 2018 and $1.35 for 2019.