Redwood Trust(RWT) ZACKS·2024-12-20 18:01Core Viewpoint - The upgrade of Redwood Trust to a Zacks Rank 2 indicates a positive earnings outlook, which is likely to lead to increased buying pressure and a rise in stock price [2][9]. Earnings Estimates and Stock Movement - Changes in a company's future earnings potential, as shown by earnings estimate revisions, are strongly correlated with near-term stock price movements, influenced by institutional investors [3][12]. - Analysts have raised their earnings estimates for Redwood Trust, with the Zacks Consensus Estimate increasing by 15.8% over the past three months [14]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [4]. - Redwood Trust's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [7][8]. Earnings Outlook for Redwood Trust - Redwood Trust is expected to earn $0.57 per share for the fiscal year ending December 2024, reflecting a year-over-year increase of 147.8% [5]. - The upward trend in earnings estimates indicates an improvement in the company's underlying business, which should be positively recognized by investors [12].