Two Harbors price target lowered to $14.75 from $15.75 at Compass Point

Compass Point lowered the firm’s price target on Two Harbors (TWO) to $14.75 from $15.75 and keeps a Buy rating on the shares. Two Harbors’ equity allocation will result in relative underperformance in a period where current coupon spreads tighten and interest rates generally decline, but because the firm thinks that RMBS spreads will be range bound and the easing cycle will be gradual and relatively moderate, it projects that the company’s equity allocation and hedging will result in “a sustainable dividend and BVPS stability.” The firm expects NIM to turn positive in 2025, the analyst added.