Deutsche Bank Reiterates Buy rating on Redwood Trust (RWT)

Deutsche Bank is out with a research report this morning, where it reiterates its Buy rating on Redwood Trust Inc. RWT; it has a $20.00 price target on the stock. The DB analysts cited the company’s recent earnings report, which was better than expected due to lower loan loss provisions. The analysts believe RWT is well positioned to drive earnings growth from new investments in the upcoming quarters. In regards to valuation, they remarked, “Our target continues to be based on applying a 1.5x multiple to Redwood’s economic book value. Historically, Redwood has traded in a range of roughly 1-2x book value, and we believe a multiple at the mid-point of the range is appropriate given the company’s strong balance sheet, excess capital and expected returns on future investments.”