Redwood Trust (NYSE:RWT) Price Target Lowered to $5.50 at Keefe, Bruyette & Woods

Key Points

• Keefe, Bruyette & Woods lowered Redwood Trust’s price target from $6.00 to $5.50 while maintaining an “outperform” rating, implying about 17.4% upside from the reported current price. The broader analyst consensus remains “Hold” with a $6.00 target.
• Redwood Trust shares fell 5.2% and opened at $4.68, near the lower end of their 12-month range of $4.19 to $6.97.
• The company’s quarterly EPS of $0.25 exceeded one consensus estimate, but revenue of $78.5 million missed expectations and Redwood posted a $2.9 million GAAP net loss, contributing to investor concerns.

Redwood Trust (NYSE:RWT - Get Free Report) had its price target lowered by analysts at Keefe, Bruyette & Woods from $6.00 to $5.50 in a research report issued to clients and investors on Wednesday,Benzinga reports. The brokerage currently has an "outperform" rating on the real estate investment trust's stock. Keefe, Bruyette & Woods' price objective would suggest a potential upside of 17.40% from the company's current price.

Several other research firms have also weighed in on RWT. Zacks Research lowered shares of Redwood Trust from a "hold" rating to a "strong sell" rating in a research note on Tuesday, July 21st. Wells Fargo & Company set a $6.00 price target on Redwood Trust in a report on Wednesday. Weiss Ratings reaffirmed a "sell (d)" rating on shares of Redwood Trust in a research report on Wednesday, June 24th. Piper Sandler reduced their target price on Redwood Trust from $6.50 to $5.50 and set a "neutral" rating for the company in a research note on Thursday, July 2nd. Finally, JonesTrading decreased their target price on Redwood Trust from $6.25 to $6.00 and set a "buy" rating on the stock in a report on Tuesday. Six analysts have rated the stock with a Buy rating, two have issued a Hold rating and two have issued a Sell rating to the stock. According to MarketBeat, the stock presently has an average rating of "Hold" and a consensus target price of $6.00.

Redwood Trust Trading Down 5.2%

Shares of Redwood Trust stock opened at $4.68 on Wednesday. The stock has a market cap of $586.66 million, a P/E ratio of -6.01 and a beta of 1.37. The company has a quick ratio of 59.63, a current ratio of 59.63 and a debt-to-equity ratio of 28.42. Redwood Trust has a 12-month low of $4.19 and a 12-month high of $6.97. The business's 50 day moving average is $5.05 and its 200-day moving average is $5.52.

Redwood Trust (NYSE:RWT - Get Free Report) last released its earnings results on Tuesday, July 28th. The real estate investment trust reported $0.25 earnings per share for the quarter, beating the consensus estimate of $0.23 by $0.02. Redwood Trust had a negative net margin of 7.23% and a positive return on equity of 14.53%. The business had revenue of $78.50 million during the quarter, compared to analysts' expectations of $89.45 million. Equities research analysts predict that Redwood Trust will post 1.07 earnings per share for the current fiscal year.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in RWT. Clearstead Advisors LLC lifted its holdings in shares of Redwood Trust by 192.5% during the fourth quarter. Clearstead Advisors LLC now owns 5,428 shares of the real estate investment trust's stock worth $30,000 after buying an additional 3,572 shares in the last quarter. Russell Investments Group Ltd. increased its position in Redwood Trust by 331.8% during the second quarter. Russell Investments Group Ltd. now owns 7,915 shares of the real estate investment trust's stock worth $47,000 after acquiring an additional 6,082 shares during the period. Westbourne Investments Inc. bought a new position in Redwood Trust during the fourth quarter worth about $55,000. Bank of Marin acquired a new stake in Redwood Trust in the 4th quarter worth about $58,000. Finally, Abel Hall LLC bought a new stake in Redwood Trust in the 4th quarter valued at about $58,000. 74.34% of the stock is owned by institutional investors and hedge funds.

Redwood Trust News Summary

Here are the key news stories impacting Redwood Trust this week:

• Positive Sentiment: Analysts remain bullish: JonesTrading lowered its price target modestly from $6.25 to $6.00 but maintained a “buy” rating. BTIG Research also reaffirmed its “buy” rating with a $6.00 target, implying roughly 28% potential upside from recent levels. Benzinga analyst rating reports
• Positive Sentiment: Mortgage banking remained a key strength: Production exceeded $8 billion for the second consecutive quarter, while Mortgage Banking platforms generated $40.1 million in GAAP net income, up 9% sequentially. Redwood also declared its regular $0.18 quarterly dividend and reported $192 million in unrestricted cash. Redwood Trust Q2 results
• Neutral Sentiment: Adjusted earnings were mixed: Redwood reported quarterly EPS of $0.25, above one analyst consensus estimate of $0.23 and up from $0.18 a year earlier, but below the Zacks consensus estimate of $0.26. This divergence may contribute to uncertainty over the quality and sustainability of the quarter’s earnings. Zacks Redwood Trust earnings report
• Negative Sentiment: GAAP results and revenue raised concerns: Redwood posted a $2.9 million GAAP net loss, or $0.03 per share. Revenue of $78.5 million also fell short of the $89.45 million consensus estimate, while book value per share declined to $6.90 from $7.12 in the prior quarter. These factors likely explain the selling pressure despite the mortgage-banking gains. TipRanks Redwood Trust Q2 results

Redwood Trust Company Profile

Redwood Trust, Inc NYSE: RWT is a publicly traded real estate investment trust specializing in the U.S. residential mortgage market. Headquartered in Mill Valley, California, the company focuses on investing in a diversified portfolio of residential mortgage assets, including whole loans, agency and non-agency mortgage-backed securities, and structured credit products.

The company's core activities encompass the acquisition, financing, and management of prime residential mortgage whole loans and mortgage-backed securities.

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