RITM Stock Forecast & Price Target

Rithm Capital Corp demonstrates a positive outlook driven by its diversified investment portfolio and operational growth, as evidenced by an increase in owned UPB to $597 billion and a significant rise in third-party servicing. The company is projected to see core earnings slightly increase to $2.20 for FY25, alongside an estimated year-end book value reaching $13.23, highlighting strong financial performance and resilience across various market environments. Additionally, the asset management segment has shown robust performance, contributing to an improved book value per share of $12.83, indicating potential for continued growth and stability.

Rithm Capital Corp is facing fundamental challenges, as the company's total revenues of $965 million fell short of the estimated $1,125 million, primarily due to lower-than-expected net servicing revenue and significant losses. Additionally, the decline in lock volumes and potential increases in mortgage rates could lead to elevated prepayment activity, compressing net interest margins and negatively affecting the company's MSR valuations. Furthermore, anticipated periods of illiquidity in the mortgage markets may further limit available secured borrowing, compounding the financial pressures on Rithm Capital.