Redwood Trust (NYSE:RWT) Lowered to Strong Sell Rating by 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.

Wall Street Zen cut shares of Redwood Trust (NYSE:RWT - Free Report) from a hold rating to a strong sell rating in a research note released on Saturday.

A number of other equities research analysts also recently weighed in on RWT. JPMorgan Chase & Co. raised their price objective on Redwood Trust from $5.50 to $6.00 and gave the company a "neutral" rating in a research report on Thursday, May 1st. Keefe, Bruyette & Woods cut Redwood Trust from an "outperform" rating to a "market perform" rating and reduced their price objective for the stock from $7.00 to $6.50 in a research note on Thursday, July 10th. JMP Securities reduced their price target on Redwood Trust from $7.50 to $7.00 and set a "market outperform" rating for the company in a research report on Thursday, July 31st. UBS Group reduced their price target on Redwood Trust from $7.00 to $6.50 and set a "buy" rating for the company in a research report on Thursday, July 31st. Finally, Jones Trading restated a "buy" rating and issued a $7.00 price objective on shares of Redwood Trust in a research report on Friday, May 2nd. One analyst has rated the stock with a sell rating, four have assigned a hold rating, three have issued a buy rating and one has issued a strong buy rating to the company's stock. According to data from MarketBeat.com, the company has an average rating of "Hold" and an average price target of $7.22.

Redwood Trust Trading Down 0.8%

RWT stock traded down $0.05 during midday trading on Friday, reaching $5.69. The company's stock had a trading volume of 404,158 shares, compared to its average volume of 997,205. Redwood Trust has a 1 year low of $4.68 and a 1 year high of $8.15. The company has a debt-to-equity ratio of 18.74, a quick ratio of 39.35 and a current ratio of 39.35. The stock has a fifty day simple moving average of $5.80 and a two-hundred day simple moving average of $5.99. The firm has a market capitalization of $756.79 million, a price-to-earnings ratio of -8.88 and a beta of 1.31.

Redwood Trust (NYSE:RWT - Get Free Report) last posted its quarterly earnings results on Wednesday, July 30th. The real estate investment trust reported $0.18 earnings per share (EPS) 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. On average, equities research analysts predict that Redwood Trust will post 0.78 EPS for the current year.

Redwood Trust Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Monday, June 30th. Shareholders of record on Monday, June 23rd were given a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a yield of 12.7%. The ex-dividend date was Monday, June 23rd. Redwood Trust's dividend payout ratio is -112.50%.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of RWT. KLP Kapitalforvaltning AS acquired a new position in shares of Redwood Trust in the fourth quarter worth $169,000. LPL Financial LLC lifted its stake in shares of Redwood Trust by 11.9% in the fourth quarter. LPL Financial LLC now owns 145,459 shares of the real estate investment trust's stock valued at $950,000 after buying an additional 15,437 shares during the period. Invesco Ltd. raised its position in Redwood Trust by 150.9% in the fourth 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. Legal & General Group Plc increased its holdings in shares of Redwood Trust by 2.2% during the fourth quarter. Legal & General Group Plc now owns 361,935 shares of the real estate investment trust's stock worth $2,363,000 after buying an additional 7,925 shares in the last quarter. Finally, LSV Asset Management increased its holdings in shares of Redwood Trust by 17.1% during the fourth quarter. LSV Asset Management now owns 1,115,204 shares of the real estate investment trust's stock worth $7,282,000 after buying an additional 163,104 shares in the last quarter. Institutional investors own 74.34% of the company's stock.

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.