Rithm Capital: Undervalued Income Play with Growing Commercial Real Estate and Mortgage Platform Upside

Analyst Eric Hagen of BTIG maintained a Buy rating on Rithm Capital, retaining the price target of $16.00.

Eric Hagen has given his Buy rating due to a combination of factors tied to valuation, income, and strategic positioning. He views Rithm Capital as attractively priced across its capital structure, highlighting the common shares’ high dividend yield and low earnings multiple, as well as compelling returns on both the preferred stock and unsecured bonds. He also notes that the implied value of the Newrez mortgage platform looks conservative relative to recent acquisition prices in the non-bank mortgage sector, pointing to potential upside as the market reassesses these assets. Additionally, he sees supportive tailwinds for mortgage originations from policy initiatives aimed at bolstering agency mortgage-backed security purchases.

Hagen further emphasizes that Rithm’s deliberate expansion into commercial real estate should be a key driver for the stock in the coming year. He points to the company’s diversified CRE platform—spanning GreenBarn, the Paramount office portfolio, Sculptor’s high-performing real estate funds, and the externally managed Rithm Property Trust—as a source of both fee income and investment returns. The recent fundraising success at Sculptor, coupled with historical strong performance in its prior real estate vehicles, reinforces his confidence in the platform’s earnings power. He also highlights the strategic use of Rithm’s lending arm, Genesis Capital, to finance GreenBarn acquisitions as a repeatable model that can unlock incremental value through cross-platform synergies. Finally, his $16 price target, based on an earnings multiple above the current level, supports a view that the shares are undervalued relative to their earnings potential and income profile.

In another report released yesterday, UBS also resumed coverage with a Buy rating on the stock with a $16.00 price target.

Based on the recent corporate insider activity of 21 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of RITM in relation to earlier this year.