Redwood Trust (NYSE:RWT) Rating Lowered to Strong Sell at Wall Street Zen

Key Points

• Redwood Trust has been downgraded from a "hold" rating to a "strong sell" by Wall Street Zen, marking a significant shift in analyst sentiment towards the company.
• Several research firms have adjusted their price targets for Redwood Trust, with UBS lowering it to $6.50, while Jones Trading maintained a target of $7.00 with a "buy" rating.
• The company reported a net margin of -9.26% and missed earnings estimates, indicating potential challenges in financial performance.

Redwood Trust (NYSE:RWT - Get Free Report) was downgraded by research analysts at Wall Street Zen from a "hold" rating to a "strong sell" rating in a research report issued to clients and investors on Saturday.

A number of other research firms have also recently issued reports on RWT. UBS Group lowered their target price on Redwood Trust from $7.00 to $6.50 and set a "buy" rating for the company in a research note on Thursday. Jones Trading reissued a "buy" rating and set a $7.00 price objective on shares of Redwood Trust in a research report on Friday, May 2nd. JPMorgan Chase & Co. raised their price objective on shares of Redwood Trust from $5.50 to $6.00 and gave the stock a "neutral" rating in a report on Thursday, May 1st. JMP Securities reduced their target price on shares of Redwood Trust from $7.50 to $7.00 and set a "market outperform" rating for the company in a research note on Thursday. Finally, Keefe, Bruyette & Woods cut Redwood Trust from an "outperform" rating to a "market perform" rating and lowered their target price for the stock from $7.00 to $6.50 in a report on Thursday, July 10th. One investment analyst has rated the stock with a sell rating, five have issued a hold rating, three have issued a buy rating and one has given a strong buy rating to the company's stock. According to data from MarketBeat.com, Redwood Trust presently has an average rating of "Hold" and a consensus price target of $7.28.

Redwood Trust Price Performance

NYSE RWT opened at $5.46 on Friday. The stock's 50 day simple moving average is $5.80 and its 200 day simple moving average is $6.00. The company has a debt-to-equity ratio of 18.74, a current ratio of 39.35 and a quick ratio of 39.35. Redwood Trust has a one year low of $4.68 and a one year high of $8.15. The firm has a market cap of $726.84 million, a PE ratio of -8.53 and a beta of 1.31.

Redwood Trust (NYSE:RWT - Get Free Report) last released its earnings results on Wednesday, July 30th. The real estate investment trust reported $0.18 earnings per share for the quarter, missing analysts' consensus estimates of $0.19 by ($0.01). Redwood Trust had a positive return on equity of 8.57% and a negative net margin of 9.26%. The firm had revenue of ($38.10) million for the quarter, compared to the consensus estimate of $31.00 million. As a group, sell-side analysts forecast that Redwood Trust will post 0.78 earnings per share for the current fiscal year.

Hedge Funds Weigh In On Redwood Trust

Several institutional investors and hedge funds have recently bought and sold shares of the company. Invesco Ltd. lifted its stake in Redwood Trust by 150.9% in the 4th quarter. Invesco Ltd. now owns 1,995,520 shares of the real estate investment trust's stock worth $13,031,000 after purchasing an additional 1,200,050 shares in the last quarter. LSV Asset Management grew its holdings in shares of Redwood Trust by 58.9% during the 1st quarter. LSV Asset Management now owns 1,772,345 shares of the real estate investment trust's stock valued at $10,758,000 after purchasing an additional 657,141 shares during the last quarter. Jane Street Group LLC purchased a new position in shares of Redwood Trust in the first quarter worth about $2,018,000. Nuveen LLC bought a new stake in Redwood Trust in the first quarter valued at approximately $1,983,000. Finally, Balyasny Asset Management L.P. raised its holdings in Redwood Trust by 19.2% during the 4th quarter. Balyasny Asset Management L.P. now owns 1,994,294 shares of the real estate investment trust's stock valued at $13,023,000 after buying an additional 321,612 shares during the last quarter. 74.34% of the stock is owned by institutional investors.

Redwood Trust Company Profile

Redwood Trust, Inc, together with its subsidiaries, operates as a specialty finance company in the United States. The company operates through three segments: Residential Consumer Mortgage Banking, Residential Investor Mortgage Banking, and Investment Portfolio. The Residential Consumer Mortgage Banking segment operates a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization, or transfer to its investment portfolio.

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