Redwood Trust (NYSE:RWT) Upgraded at Zacks Research

Redwood Trust (NYSE:RWT) was upgraded by equities researchers at Zacks Research from a “strong sell” rating to a “hold” rating in a research report issued to clients and investors on Tuesday, Zacks reports.

Several other analysts have also issued reports on the stock. JPMorgan Chase & Co. reduced their price target on shares of Redwood Trust from $6.50 to $6.00 and set an “overweight” rating on the stock in a research report on Friday, July 17th. Wells Fargo & Company cut their target price on Redwood Trust from $7.00 to $6.00 and set an “equal weight” rating for the company in a research note on Wednesday, July 29th. Keefe, Bruyette & Woods reduced their target price on Redwood Trust from $5.50 to $4.75 and set an “outperform” rating on the stock in a report on Monday. Piper Sandler decreased their price target on Redwood Trust from $6.50 to $5.50 and set a “neutral” rating on the stock in a research note on Thursday, July 2nd. Finally, BTIG Research reissued a “buy” rating and set a $6.00 price target on shares of Redwood Trust in a report on Tuesday, July 28th. Six equities research analysts have rated the stock with a Buy rating, four have issued a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, the stock currently has a consensus rating of “Hold” and a consensus target price of $5.84.

Redwood Trust Trading Down 0.1%

Shares of RWT stock opened at $3.90 on Tuesday. The company has a market capitalization of $490.51 million, a PE ratio of -97.60 and a beta of 1.37. The firm has a 50 day moving average price of $4.66 and a two-hundred day moving average price of $5.17. The company has a quick ratio of 67.49, a current ratio of 67.49 and a debt-to-equity ratio of 31.69. Redwood Trust has a 12-month low of $3.22 and a 12-month high of $6.97.

Redwood Trust (NYSE:RWT) last posted its quarterly earnings data on Tuesday, July 28th. The real estate investment trust reported $0.25 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.23 by $0.02. Redwood Trust had a net margin of 0.42% and a return on equity of 16.02%. The firm had revenue of $56.01 million during the quarter, compared to the consensus estimate of $89.45 million. As a group, analysts predict that Redwood Trust will post 1.03 earnings per share for the current year.

Insider Transactions at Redwood Trust

In other Redwood Trust news, Director Greg Kubicek bought 50,000 shares of Redwood Trust stock in a transaction on Tuesday, September 15th. The shares were purchased at an average cost of $3.85 per share, with a total value of $192,500.00. Following the acquisition, the director directly owned 127,185 shares of the company’s stock, valued at $489,662.25. The trade was a 64.78% increase in their position. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Christopher Abate purchased 100,000 shares of Redwood Trust stock in a transaction on Tuesday, September 15th. The stock was bought at an average price of $3.84 per share, for a total transaction of $384,000.00. Following the transaction, the chief executive officer directly owned 679,283 shares in the company, valued at approximately $2,608,446.72. The trade was a 17.26% increase in their position. The disclosure for this purchase is available in the SEC filing. Over the last ninety days, insiders bought 239,276 shares of company stock valued at $928,430. Company insiders own 3.30% of the company’s stock.

Hedge Funds Weigh In On Redwood Trust

Several hedge funds and other institutional investors have recently bought and sold shares of the company. WINTON GROUP Ltd boosted its position in Redwood Trust by 10.8% during the second quarter. WINTON GROUP Ltd now owns 76,700 shares of the real estate investment trust’s stock valued at $364,000 after acquiring an additional 7,500 shares during the last quarter. Engineers Gate Manager LP lifted its stake in shares of Redwood Trust by 33.5% in the 2nd quarter. Engineers Gate Manager LP now owns 45,400 shares of the real estate investment trust’s stock valued at $215,000 after purchasing an additional 11,400 shares during the period. Squarepoint Ops LLC acquired a new position in shares of Redwood Trust in the 2nd quarter valued at about $157,000. VIRGINIA RETIREMENT SYSTEMS ET Al bought a new stake in shares of Redwood Trust during the 2nd quarter valued at about $990,000. Finally, Two Sigma Securities LLC bought a new stake in shares of Redwood Trust during the 2nd quarter valued at about $140,000. Institutional investors and hedge funds own 74.34% of the company’s stock.

Key Headlines Impacting Redwood Trust

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

• Positive Sentiment: Redwood Trust insiders made substantial open-market purchases near $3.84–$3.98 per share. CEO Christopher Abate bought 100,000 shares, President Dashiell Robinson purchased 63,211, CFO Brooke Carillo acquired 26,065, and Director Greg Kubicek bought 50,000. The purchases increased their holdings by roughly 17% to 65% and may signal that management and the board consider RWT undervalued. Redwood Trust insider purchase filing
• Positive Sentiment: Redwood completed a private offering of $205 million in 7.00% convertible notes and a related restructuring. The proceeds should improve liquidity and financial flexibility for its residential mortgage-credit business. Redwood Trust convertible notes offering
• Neutral Sentiment: Redwood declared a quarterly dividend of $0.18 per share, equivalent to a $0.72 annualized payout and an indicated yield of about 18%. The high yield may attract income-oriented investors, but the reported negative payout ratio highlights concerns about dividend sustainability.
• Negative Sentiment: Keefe, Bruyette & Woods lowered its price target on RWT from $5.50 to $4.75 while retaining an “outperform” rating. The reduced target signals weaker expectations and may pressure sentiment, although it remains above recent trading levels. Keefe, Bruyette & Woods lowers Redwood Trust price target
• Negative Sentiment: The convertible financing could eventually dilute existing shareholders if the notes convert into equity. Redwood’s latest results also showed revenue of $56.01 million versus an $89.45 million consensus estimate, despite adjusted earnings modestly exceeding expectations.

Redwood Trust Company Profile

Redwood Trust, Inc is a real estate investment trust that focuses on residential real estate credit. The company invests in, finances and manages residential mortgage assets, including jumbo and other non-agency mortgage loans, mortgage-backed securities and related credit investments. Its activities are primarily focused on the U.S. housing market.

Redwood operates through businesses that support the origination, financing and securitization of residential mortgage credit. Its platform has historically included Sequoia, which acquires and securitizes residential loans, as well as CoreVest, which provides financing to residential real estate investors and developers.