Redwood Trust, Inc. RWT is slated to report first-quarter 2026 earnings on April 29, after market close.
The company’s fourth-quarter 2025 results benefited from continued momentum across mortgage banking platforms, with higher production revenues translating directly into earnings growth. However, a decline in book value per share (BVPS) was concerning.
RWT earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with an average beat of 11.39%.
Redwood Trust, Inc. Price and EPS Surprise
Redwood Trust, Inc. price-eps-surprise | Redwood Trust, Inc. Quote
The Zacks Consensus Estimate for first-quarter 2026 earnings of 28 cents per share has been unchanged over the past week. This indicates a rise from the 14 cents reported in the year-ago quarter.
The Zacks Consensus Estimate for net interest income for the first quarter of 2026 is pegged at $31.5 million, indicating a jump of 13.2% from the year-ago quarter’s actual.
Factors to Impact RWT’s Q1 Performance
The first quarter of 2026 was challenging for the mortgage banking business. While rates moved lower early in the quarter, they climbed again toward the end of March as macro uncertainty and geopolitical tensions pushed interest rates higher. Throughout the quarter, the mortgage rate hovered at 6-6.5%. While refinance activity has seen a slight boost from the 2025 lows, purchase volume faced pressure from inventory constraints.
Given this backdrop, Redwood Trust’s mortgage banking business is likely to have been decent. The Zacks Consensus Estimate for mortgage banking activities’ net income of $56.2 million indicates a rise from the $33 million reported in the year-ago quarter.
Also, the Federal Reserve kept interest rates unchanged in the first quarter. As such, given stabilizing funding costs, RWT’s net interest income (NII) is likely to have benefited.
In recent months, the company has taken targeted actions to simplify its operating structure and sharpen its focus on businesses generating strong and sustainable returns. As such, the company is likely to have realized cost savings in the quarter to be reported.
What Our Model Unveils for Redwood Trust
Our proven model conclusively predicts an earnings beat for RWT this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: RWT has an Earnings ESP of +20%.
Zacks Rank: Redwood Trust currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of RWT’s Peers
AGNC Investment Corp. AGNC reported first-quarter of 2026 net spread and dollar roll income per common share of 42 cents, topping the Zacks Consensus Estimate by 16.7%. However, the metric declined 4.5% from the year-ago quarter’s 44 cents.
AGNC’s results benefited from rallies in average asset yield and NII. Also, a rise in tangible net BVPS on the portfolio was positive. However, a reduced net interest spread and a higher weighted average cost of funds were concerning.
Annaly Capital Management, Inc. NLY registered first-quarter 2026 earnings available for distribution per average share of 76 cents, which beat the Zacks Consensus Estimate of 74 cents. The figure increased from 72 cents in the year-ago quarter.
NLY’s NII and net interest margin improved year over year in the reported quarter. Notably, the year-over-year increase in BVPS was also encouraging. However, a lower economic capital ratio was concerning.
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AGNC Investment Corp. (AGNC): Free Stock Analysis Report
Redwood Trust, Inc. (RWT): Free Stock Analysis Report
Annaly Capital Management Inc (NLY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).