Nomura's Brock Vandervliet throws in the towel on his Buy rating for Redwood Trust (RWT -5.8%). After a long period of underperformance, the stock looks "cheap" versus historical valuations, he says, but the business environment has changed.
"We no longer see a clear path toward the superior returns and premium valuation the stock enjoyed in the past," he says, downgrading to Neutral, with price target cut to $15 from $17. At the current price of $12.75, the stock is trading at a 13% discount to Sept. 30 book value.
RWT is lower by 36% YTD.
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