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    How ARI’s Shift From Troubled Loans to New Originations Could Reshape Apollo Commercial Real Estate Finance (ARI) Investors

    Simply Wall St·01/05/2026 08:28:04
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    • J.P. Morgan analysts recently named Apollo Commercial Real Estate Finance one of their top income stock picks for 2026, highlighting its progress in resolving troubled loans and plans to redeploy capital into interest-earning assets.
    • The company is also repositioning its portfolio as the mREIT sector anticipates potential book value improvement, aiming to shift capital from non-performing exposures into new loan originations with what it views as attractive risk-adjusted returns.
    • We will now examine how Apollo Commercial Real Estate Finance’s capital redeployment away from non-performing loans shapes its broader investment narrative.

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    What Is Apollo Commercial Real Estate Finance's Investment Narrative?

    To own Apollo Commercial Real Estate Finance, you have to be comfortable with a high-yield mREIT that is still working through past credit issues while trying to make better use of its capital. The big near term catalysts remain the pace of resolving non-performing loans and how quickly that freed-up cash is put back into income-producing assets, especially with earnings only modestly improving and the dividend not fully covered by profits. J.P. Morgan’s call as a top income pick for 2026 reinforces that this capital redeployment story is front and center, but it does not change the underlying risks around credit quality, book value sensitivity and funding costs. If anything, the endorsement raises the bar for execution at a time when revenue is expected to contract.

    However, there is a key income risk in the story that investors should not overlook.Insights from our recent valuation report point to the potential undervaluation of Apollo Commercial Real Estate Finance shares in the market.

    Exploring Other Perspectives

    ARI 1-Year Stock Price Chart
    ARI 1-Year Stock Price Chart

    Four Simply Wall St Community fair value views cluster between US$9.53 and US$10.79 per share, reflecting a reasonably tight band of expectations. Against that, the real debate is whether Apollo’s shift away from troubled loans can offset forecast revenue contraction and support its current payout profile over time, something different investors may interpret very differently.

    Explore 4 other fair value estimates on Apollo Commercial Real Estate Finance - why the stock might be worth just $9.53!

    Build Your Own Apollo Commercial Real Estate Finance Narrative

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.