BTIG analyst Eric Hagen has maintained their neutral stance on TWO stock, giving a Hold rating yesterday.
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Eric Hagen has given his Hold rating due to a combination of factors surrounding the pending merger with United Wholesale and the current valuation of Two Harbors. He notes that the shareholder vote was delayed to gather more support, with the stock having sold off sharply since the deal was announced and after UWMC’s earnings, and he sees the current price as broadly in line with peers despite trading at a sizable discount to estimated NAV.
At the same time, Hagen emphasizes that while the strategic logic for combining with UWMC remains compelling for managing prepayment risk and overcoming leverage constraints, there is uncertainty over whether UWMC can or will improve the terms. He also flags the risk of additional downside for Two Harbors if the transaction collapses, even though a stalking-horse bidder could emerge, and balances those risks against the attractive dividend yields and potential upside if deal visibility and terms improve, leading him to a neutral, Hold stance rather than a more forceful rating in either direction.
Hagen covers the Real Estate sector, focusing on stocks such as Annaly Capital, AGNC Investment, and Rithm Capital. According to TipRanks, Hagen has an average return of 1.2% and a 46.21% success rate on recommended stocks.
In another report released yesterday, TipRanks – Google also reiterated a Hold rating on the stock with a $9.00 price target.