Two Harbors Investments (NYSE:TWO) Cut to Underweight at JPMorgan Chase & Co.

Key Points

• JPMorgan downgraded Two Harbors from "neutral" to underweight with an $11.00 target price, implying roughly a 0.86% downside from the stock's then-current level.
• Analyst sentiment has trended cautious overall — the stock's average rating is listed as "Reduce" with an average target of $12.63, following multiple recent downgrades and mixed calls (seven Holds, two Sells).
• Fundamentals are weak: shares traded around $11.10, Q4 EPS missed at $0.26 versus $0.30 expected, the company shows a negative PE and net margin, and it is a leveraged mREIT focused on RMBS with a market cap of about $1.17 billion.

Two Harbors Investments (NYSE:TWO - Get Free Report) was downgraded by analysts at JPMorgan Chase & Co. from a "neutral" rating to an "underweight" rating in a research note issued to investors on Thursday,Finviz reports. They currently have a $11.00 target price on the real estate investment trust's stock. JPMorgan Chase & Co.'s target price indicates a potential downside of 0.86% from the company's current price.

Several other research analysts also recently issued reports on TWO. UBS Group downgraded shares of Two Harbors Investments from a "buy" rating to a "neutral" rating and upped their target price for the stock from $11.00 to $14.00 in a research note on Friday, January 23rd. Maxim Group cut shares of Two Harbors Investments from a "buy" rating to a "hold" rating in a report on Thursday, December 18th. Weiss Ratings reissued a "sell (d)" rating on shares of Two Harbors Investments in a report on Monday, December 29th. Zacks Research raised shares of Two Harbors Investments from a "strong sell" rating to a "hold" rating in a report on Monday, April 6th. Finally, Compass Point cut shares of Two Harbors Investments from a "buy" rating to a "neutral" rating in a report on Friday, March 27th. Seven analysts have rated the stock with a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat.com, Two Harbors Investments presently has an average rating of "Reduce" and an average target price of $12.63.

Two Harbors Investments Trading Down 0.0%

Shares of NYSE TWO opened at $11.10 on Thursday. The firm's 50 day moving average price is $10.63 and its 200-day moving average price is $10.64. The company has a market cap of $1.17 billion, a PE ratio of -2.27 and a beta of 1.08. Two Harbors Investments has a 52-week low of $8.78 and a 52-week high of $14.17. The company has a debt-to-equity ratio of 1.09, a quick ratio of 1.09 and a current ratio of 1.09.

Two Harbors Investments (NYSE:TWO - Get Free Report) last issued its earnings results on Monday, February 2nd. The real estate investment trust reported $0.26 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.30 by ($0.04). The firm had revenue of $182.18 million during the quarter, compared to the consensus estimate of ($15.44) million. Two Harbors Investments had a positive return on equity of 12.00% and a negative net margin of 109.90%. On average, equities research analysts expect that Two Harbors Investments will post 0.81 EPS for the current fiscal year.

Institutional Trading of Two Harbors Investments

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Mercer Global Advisors Inc. ADV purchased a new stake in Two Harbors Investments during the fourth quarter valued at approximately $130,000. XTX Topco Ltd increased its holdings in Two Harbors Investments by 786.2% during the fourth quarter. XTX Topco Ltd now owns 131,618 shares of the real estate investment trust's stock valued at $1,382,000 after buying an additional 116,766 shares during the last quarter. Toronto Dominion Bank purchased a new stake in Two Harbors Investments during the fourth quarter valued at approximately $634,000. Tudor Investment Corp ET AL purchased a new stake in Two Harbors Investments during the fourth quarter valued at approximately $121,000. Finally, Man Group plc purchased a new stake in Two Harbors Investments during the fourth quarter valued at approximately $1,916,000. 64.19% of the stock is owned by hedge funds and other institutional investors.

About Two Harbors Investments

Two Harbors Investments Corp. is a mortgage real estate investment trust (mREIT) that primarily invests in residential mortgage-backed securities (RMBS) issued or guaranteed by government-sponsored enterprises, as well as non-agency residential mortgage loans, mortgage servicing rights and credit risk transfer securities. The company seeks to generate attractive risk-adjusted returns for its shareholders by employing leverage to enhance net interest income derived from its portfolio of high-quality fixed-income assets.

Headquartered in Minneapolis, Minnesota, Two Harbors operates through a self-managed platform that combines portfolio management, risk-management and securitization expertise.

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