Redwood Trust (RWT) shares soared 9.5% in the last trading session to close at $5.42. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 21.2% loss over the past four weeks.
Redwood Trust’s surge in its stock price follows the broader market rally driven by the optimism surrounding Trump’s announcement on April 9, 2025, of a 90-day pause on reciprocal tariffs for most trading partners, excluding China. The tariff pause reduced immediate fears of a trade war, fostering a more favorable economic outlook. The tariff pause will likely ease cost pressure, which improves margins and enhances profitability for mREIT stocks. These factors have boosted investor confidence in mREIT stock like RWT.
This specialty finance company is expected to post quarterly earnings of $0.16 per share in its upcoming report, which represents a year-over-year change of +100%. Revenues are expected to be $26.76 million, up 11.5% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Redwood Trust, the consensus EPS estimate for the quarter has been revised 2.7% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on RWT going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Redwood Trust is a member of the Zacks REIT and Equity Trust industry. One other stock in the same industry, Franklin BSP (FBRT), finished the last trading session 4.1% higher at $11.56. FBRT has returned -16.2% over the past month.
Franklin BSP's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.33. Compared to the company's year-ago EPS, this represents a change of -19.5%. Franklin BSP currently boasts a Zacks Rank of #5 (Strong Sell).
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Redwood Trust, Inc. (RWT): Free Stock Analysis Report Franklin BSP Realty Trust, Inc. (FBRT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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