J.P. Morgan analyst Richard Shane has maintained their neutral stance on TWO stock, giving a Hold rating today.
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Richard Shane has given his Hold rating due to a combination of factors impacting Two Harbors. The company recently announced a significant litigation settlement with Pine River, which involves a substantial one-time cash payment of $375 million. This settlement, while resolving ongoing legal disputes, places a financial burden on the company, as it exceeds the previously recorded loss contingency.
Furthermore, Two Harbors has decided to reduce its common stock dividend from $0.39 to $0.34 per share, which is below expectations. Although the company reported an increase in book value per share before the settlement, the adjustment for the settlement payment results in a decrease in book value per share. These financial adjustments, alongside the new subservicing client agreement, contribute to the Hold rating as they present both challenges and opportunities for the company’s future performance.
In another report released today, RBC Capital also maintained a Hold rating on the stock with a $10.00 price target.