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Investing.com - Keefe, Bruyette & Woods (KBW) lowered its price target on Ready Capital Corp. (NYSE:RC) to $2.50 from $3.50 while maintaining an Underperform rating following the company’s third-quarter results.
KBW cited multiple factors for the reduction, including Ready Capital’s smaller interest-earning portfolio, lower originations, and projected increases in credit and real estate owned (REO) costs. These concerns align with the company’s financial health, which InvestingPro currently rates as "WEAK" based on comprehensive analysis of multiple financial indicators.
The third quarter marked an inflection point as Ready Capital’s top priority shifted to addressing $650 million in corporate debt maturities coming due in 2026, according to KBW’s analysis.
The firm noted that Ready Capital expects further credit migration in its $5 billion commercial real estate loan portfolio and plans to favor liquidations moving forward. The company also aims to reduce leverage by 1x, suggesting additional asset sales are likely.
Despite Ready Capital shares trading at 0.3 times book value, KBW remains cautious due to credit uncertainty and limited long-term earnings visibility, projecting ongoing losses and a reduction in the company’s dividend.
In other recent news, Ready Capital Corp reported its third-quarter 2025 earnings, surpassing analyst expectations. The company achieved an earnings per share of -$0.13, better than the projected -$0.23. Additionally, Ready Capital exceeded revenue estimates, bringing in $85.43 million compared to the anticipated $72.79 million. Despite these strong financial results, the company’s stock experienced a minor decline in recent trading sessions. Analysts and investors will likely focus on these earnings and revenue figures as they assess Ready Capital’s financial health. While the stock movement was noted, the earnings and revenue performance remains a key highlight. These developments are part of the broader context of Ready Capital’s ongoing financial activities.
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