Asset Management Earnings Driving Confidence in Rithm Capital (RITM)

Rithm Capital Corporation (NYSE:RITM) is one of the most favored real estate investment trusts according to Hedge Funds.

On January 8, Douglas Harter from UBS initiated coverage on Rithm Capital Corporation (NYSE:RITM). He assigned a Buy rating to the stock with an estimated price target of $16, resulting in an upside of more than 36%.

Harter’s rating is based on strong earnings potential for Rithm Capital Corporation’s (NYSE:RITM) asset management segment. The company is focused on an acquisitive strategy to strengthen its asset base, as it recently finalized the acquisition of Paramount Group.

Back on December 22, Piper Sandler analyst Crispin Love also reaffirmed his favorable outlook for Rithm Capital Corporation (NYSE:RITM). He assigned a Buy rating and raised his price target from $15 to $15.5, which now gives an upside of almost 32%.

Love sees upside for Rithm Capital Corporation (NYSE:RITM) in the near-term, given a more conducive mortgage environment that is building up. He noted the company’s diversification strategy across origination, investments, and servicing segments, and also acknowledged its consistency in generating ROE in mid-to-high teens. The analyst anticipates the ROE metric to expand more if the Fed remains dovish to push rates below 6% range.

Rithm Capital Corporation (NYSE:RITM) operates as an alternative asset manager with a focus on real estate and related services. The business is spread out across four distinct segments, i.e., origination & servicing, investment portfolio, residential transitional lending, and asset management. Through these segments, it performs various functions across the overall real estate investment lifecycle.

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Disclosure: None. This article is originally published at Insider Monkey.