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Investing.com - Keefe, Bruyette & Woods raised its price target on Rithm Capital Corp. (NYSE:RITM) stock to $14.00 from $13.50 on Tuesday, while maintaining an Outperform rating.
The investment firm cited an increase in book value during the second quarter as the primary reason for the price target adjustment. KBW’s price target multiple remains stable at 1.1x GAAP book value of $12.71 and approximately 1.2x tangible book value. This valuation appears reasonable, as the stock currently trades at 0.99x book value.
KBW’s forward estimates for fiscal years 2025, 2026, and 2027 were adjusted to $2.09, $2.12, and $2.16 per share, respectively, from previous estimates of $2.06, $2.13, and $2.16. These estimates correspond to projected return on equity figures of 16.3%, 15.9%, and 15.4% for the respective years.
The research firm noted that Rithm Capital shares currently trade at 1.03x tangible book value with an 8.2% dividend yield. KBW emphasized that the dividend remains "very well covered" by the company’s earnings. InvestingPro data confirms the company’s strong dividend history, maintaining payments for 13 consecutive years, with the current yield significantly above its 5-year average.
KBW concluded that Rithm Capital shares "remain attractive with stable current returns and strong ROEs," supporting their continued Outperform rating on the stock. This view aligns with InvestingPro’s analysis, which shows the stock as undervalued and maintains a "GOOD" Financial Health score of 2.5 out of 5. Subscribers can access the comprehensive Pro Research Report for detailed insights into RITM’s valuation and growth prospects.
In other recent news, Rithm Capital Corp announced its second-quarter earnings for 2025, which showed mixed results. The company exceeded earnings per share (EPS) expectations with a reported EPS of $0.54, surpassing the forecast of $0.51. This marks a positive surprise of 5.88%. However, the company’s revenue fell short, coming in at $925.63 million compared to the anticipated $1.21 billion, reflecting a 23.5% shortfall. Despite the revenue miss, the company’s EPS performance seemed to bolster investor confidence. There were no reports of mergers or acquisitions in this period. Analyst firms have yet to comment on potential upgrades or downgrades following these results. These developments highlight recent activities surrounding Rithm Capital Corp.
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