Lument Continues To Delever And Future Earnings Will See That Impact

2025-04-01 05:21:59 ET

Summary

• Lument Finance Trust's deleveraging continues with $144 million in loan repayments and only $13 million in new originations, shrinking the book by 24% in 2024.
• Defaults are rising, with four new loans totaling $50 million in default, posing significant risks to equity holders due to upcoming maturities.
• Despite a 22% discount to book value, the stock remains unattractive due to shrinking earnings power, limited refinancing visibility, and continued credit deterioration.
• I maintain a Hold rating as the company's fundamentals have worsened, with a forward P/E potentially reaching 12x by year-end 2025.

Lument Finance Trust ( LFT ) reported 4Q24 figures showing a continuation of the concerning trends I've been talking about this past fiscal year. Loan repayments are shrinking the most lucrative part of its balance sheet, new financing remains elusive, and defaults are growing....

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