Redwood Trust downgraded to Neutral from Overweight at JPMorgan

JPMorgan analyst Richard Shane downgraded Redwood Trust (RWT) to Neutral from Overweight with a price target of $7, down from $8. The firm says higher long-term interest rates delay the stock’s discount accretion and may put additional pressure on its residential investor loan portfolio. This could weigh on Redwood’s multiple, the analyst tells investors in a research note. JPMorgan adds that while the company delivered substantial upside to jumbo originations in 2024 as banks exited the market, this opportunity is now well understood and incorporated into estimates.