Redwood Trust price target lowered to $5.50 from $6.50 at JPMorgan

JPMorgan analyst Richard Shane lowered the firm’s price target on Redwood Trust (RWT) to $5.50 from $6.50 and keeps a Neutral rating on the shares as part of a Q1 preview for the mortgage real estate investment trusts. Lower short-term rates provide incremental credit relief for borrowers in the form of lower financing costs, but may signal an elevated risk of recession, which could pressure occupancy and rent growth rates and make final resolution of troubled assets more difficult, the analyst tells investors in a research note. The firm says elevated macro uncertainty and a more “two sided risk/reward outlook tempers” its conviction on the MREITs.