Real estate investment trust Two Harbors Investment Corp. (TWO) has reported better-than-expected quarterly earnings for the third quarter of 2021.
Earnings of $0.24 per share surpassed the Street’s expectations of $0.19 per share. The company had reported earnings of $0.28 per share in the same quarter last year.
Net interest income in the third quarter declined 76.7% year-over-year to $14.1 million due to lower interest income. Other income grew 41.4% during the quarter to $107.5 million. (See Two Harbors stock charts on TipRanks)
As of September 30, 2021, Two Harbors’ portfolio comprised $8.9 billion of Agency residential mortgage-backed securities, Agency Derivatives and MSR, including their associated notional hedges. Also, it held $9 billion bond equivalent value of net long to-be-announced securities.
Two Harbors’ President, CEO and Chief Investment Officer, Bill Greenberg, said, “There was robust activity in our MSR program where we settled on $29 billion UPB during the quarter and committed to purchase another $21 billion UPB. With our recent capital issuances, we continue to position the company to deploy capital in MSR, and in RMBS as attractive opportunities arise.”
Recommendation
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 2 Buys and 1 Hold. The average Two Harbors price target of $7.25 implies 13.81% upside potential from current levels.
Positive Investor Sentiment
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Two Harbors, with 14% of investors on TipRanks increasing their exposure to TWO stock over the past 30 days.
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