Capital Trust downgraded to sell at UBS on weak mortgage-backed securities

Mon. June 23, 2008; Posted: 07:30 AM

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NEW YORK, Jun 23, 2008 (Thomson Financial via COMTEX) -- CT | Quote | Chart | News | PowerRating -- Capital Trust Inc. Monday was downgraded to sell from neutral at UBS Investment Research, which said the commercial mortgage-backed securities market will remain weak into 2009 and loan performance will worsen, which will hurt a highly-exposed Capital Trust.

As such, the company's 45% price-to-book premium multiple compared to its peers appears unwarranted, the firm added.

UBS also lowered its price target to $19 from $27.

Capital Trust reserve levels are just 0.2%, the lowest in its peer group, UBS said. Reserves for the sector are expected to hit 1.5% to 2% over the next 12 to 18 months, implying a meaningful drag on earnings at Capital Trust.

Capital Trust shares closed at $25.11 on Friday. Christie Rizk cr/pc

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For full details on Capital Trust Inc Md (CT) click here. Capital Trust Inc Md (CT) has Short Term PowerRatings of 4. Details on Capital Trust Inc Md (CT) Short Term PowerRatings is available at This Link.

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