SummaryCompaniesNintendo shares fall 7%Market hoping for blockbuster games to boost momentumNintendo to release AAA this year, analyst thinksSony shares rise 10%Announced new Japan image sensor joint venture with TSMCTOKYO, May 11 (Reuters) - Nintendo's (7974.T), opens new tab shares fell 7% in Tokyo on Monday after the company hiked Switch 2 prices and as the market frets over a lack of high-profile games to build momentum.
Nintendo posted robust hardware sales for the financial year ended March but, while the company is known for its conservative forecasts, its outlook for this year underwhelmed the market.
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The Kyoto-based firm extended the life of the original Switch with games from franchises such as "The Legend of Zelda" and, while it has scored hits such as "Pokemon Pokopia", it is seen as lacking potential blockbusters.
"The year-on-year decline in game shipment guidance risks signaling that Nintendo lacks confidence in its pipeline," Morningstar analyst Kazunori Ito wrote in a note.
"However, as user engagement typically accelerates in the second year of a console cycle, we view this as too pessimistic," he wrote.
Nintendo also said it would raise prices of its Switch 2, with the Japanese language Switch 2 Japan model to go up by 10,000 yen ($63.73) to 59,980 yen from May 25 and prices in markets such as the U.S. to rise from September 1.
The company has an audience among casual gamers who are seen as particularly sensitive to price hikes, which come as electronics makers grapple with a memory chip price surge.
A person holds a Nintendo Switch 2 game console's box as Nintendo starts selling the new consoles globally, at an electronics store in Tokyo, Japan June 5, 2025. REUTERS/Issei Kato Purchase Licensing Rights, opens new tab
The second year "is crucial and our non-consensus view is that it will release a Mario AAA game this year," Jefferies analyst Atul Goyal wrote in a note.
"The... guidance bar is low by design — Nintendo has beaten initial (operating profit) guidance in each of the past four fiscal years," he wrote.
Unlike more diversified peer Sony (6758.T), opens new tab, Nintendo remains highly dependent on its core gaming business even as its characters and intellectual property prove popular in movies and at theme parks.
With the PlayStation 5 having spent longer on the market, "Sony is in a much better position to pass higher costs of memory chips to consumers," Amir Anvarzadeh of Asymmetric Advisors wrote in a note.
Sony, whose shares were up 10% in Tokyo on Monday, forecast lower sales but higher profit at its gaming business. The company also said it was planning a new joint venture to develop and manufacture image sensors in Japan with TSMC (2330.TW), opens new tab as it seeks to control costs.
"These results were at least validating of the thesis that Sony can protect group profits by scaling back PS5 shipments," Bernstein analyst David Dai wrote in a note.
($1 = 156.9100 yen)
Reporting by Sam Nussey; Editing by Sam Holmes
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Nintendo shares plunged on Monday after the gaming giant warned that sales of its flagship Switch 2 console would fall this fiscal year and it announced a price hike for the device due to rising memory costs.
Shares of Nintendo closed 8.4% lower in Tokyo, Japan to 7,020 yen (US$44.64), the lowest since August 2024. The stock has fallen 34% this year.
On Friday, Nintendo announced price hikes for its Switch 2 console in markets across the world. An unprecedented surge in the price of memory chips, driven by the AI infrastructure boom, has increased the cost of producing the device.
Nintendo said that it forecasts 16.5 million unit sales of the Switch 2 in the current fiscal year, which ends in March 2027, down from 19.86 million since its launch last June. The predicted fall in sales of the console — which is less than a year old — is raising concerns among investors.
"Nintendo is predicting Switch 2 hardware sales to go down this fiscal year — instead of going up as it usually is the case with new consoles," Serkan Toto, CEO of Kantan Games, told CNBC on Monday.
"The biggest factor is of course the price hike that Nintendo thinks will lead to softer demand."
Nintendo shares since August 2024.
'Lowballing' guidanceNintendo has a reputation for issuing conservative guidance. Toto said the latest numbers are likely no different.
"I believe that Nintendo is, as usual, lowballing because users will get used to the new price of the console over time," Toto said.
Kazunori Ito, director at Morningstar, said in a note on Sunday that Nintendo's guidance was "overly conservative."
"We believe the console price hike was inevitable given the prolonged inflation in memory costs. While the weak shipment guidance likely reflects undue caution on demand, the hike itself was kept modest, and we expect shipments to hold up better than the company anticipates," Ito said.
The price of the Switch 2 was raised by $50 in the U.S., and by 10,000 Japanese yen (US$64) in Japan.
Ito said he expects Switch 2 sales to hit 19 million units in the current fiscal year compared to Nintendo's forecast of 16.5 million units.
"We view Nintendo's shares as undervalued," Ito said. "The market appears overly focused on near-term headwinds and conservative guidance, while underappreciating the long-term earnings growth from over 100 million Switch users migrating to the new platform and increasing game purchases."
Game sales concernsAnother metric the market watched closely was Nintendo's software or game sales, because blockbuster titles can help drive sales of hardware.
The Japanese gaming giant said it expects software sales across the original Switch and Switch 2 to total 165 million units in the fiscal year ending March 2027. That would mark a roughly 11% year-on-year fall.
"The year-on-year decline in game shipment guidance risks signaling that Nintendo lacks confidence in its pipeline," Morningstar's Ito said.
"However, as user engagement typically accelerates in the second year of a console cycle, we view this as too pessimistic," he said, adding that Morningstar forecasts software sales of 205 million units, above Nintendo's own forecast.
Nintendo has had some early game successes with the Switch 2, including "Mario Kart World" and "Pokémon Pokopia," which became a surprise viral hit and sold over 4 million units in the five weeks after its release in March.
watch now
However, investors are waiting to hear more on Nintendo's gaming pipeline, and in particular on any upcoming games involving some of its most iconic characters such as Mario and Zelda. Investors are watching closely for when the company will announce a Nintendo Direct event, which is where it typically lays out its upcoming major hits.
"We should get a new Nintendo Direct presentation laying out the software 2026 lineup as soon as next month," Toto said.
Stocks are edging higher Monday, with chipmakers Intel (INTC +6.98%), Nvidia (NVDA +1.31%), and Micron (MU +5.27%) among the most active stocks following last week’s blistering AI-driven rally. The mood has a complication, and that's oil. U.S. crude jumped 2.8% to $98.07 a barrel after weekend U.S.-Iran diplomacy stalled, leaving the Strait of Hormuz closed. Brent crossed back above $104. Rising energy prices are pushing bond yields up, with the 10-year at 4.41%, a headwind for growth stocks.
Two catalysts to watch this week: The Senate is expected to confirm Kevin Warsh as Fed chair today, and Tuesday’s April CPI print is forecast at 3.8% — up from 3.3% in March. Wildcard for markets: Trump heads to Beijing later this week to push Xi Jinping on ending the war and discuss trade. Texas AG Sues Netflix for Spying on Kids 3:47 pm — NFLX -2.60%
Texas Attorney General Ken Paxton filed suit against Netflix (NFLX 0.93%) on Monday, accusing the streamer of secretly collecting and selling user data to advertisers. The company has publicly claimed otherwise; the complaint quotes former CEO Reed Hastings saying in 2020, "we don’t collect anything." Paxton wants Netflix to purge illegally collected data and pay up to $10,000 per violation. My read on the suit," wrote CMFFrankDip, Ticker Guide for Netflix, "is that Netflix is using viewing data to target people with programmable ads—this is done by most every media company."
"When You Watch Netflix, Netflix Watches You": That’s the AG’s own language in the complaint — and it covers children, too, with the suit alleging Netflix deliberately engineered its platform, including autoplay, to maximize screen time and data harvesting. Billions at Stake: Netflix allegedly sold viewer habits to commercial data brokers and ad-tech firms for years, generating substantial revenue — now potentially subject to per-violation civil fines.
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Airbnb Is Becoming a Super App 3:31 pm — ABNB -2.22%
Airbnb (ABNB +0.85%) CEO Brian Chesky is done thinking small. He wants to transform Airbnb from a home-rental brand into a full-service platform built around individual identity. Picture Amazon’s (AMZN +0.32%) leap from books to everything—but for how you live, travel, and experience the world. Chesky wants a universal profile at the center, storing your preferences, building a real-world social graph, and eventually unlocking a membership program with up to 50 different offerings. Motley Fool analyst Jason Moser recently pointed out that Truist (TFC +2.31%) upgraded Airbnb from Sell to Hold with a $129 price target, citing 16% gross booking value growth in Q4 and improving 2026 profitability expectations.
"Proof of personhood" could be Airbnb’s secret weapon: Chesky wants Airbnb to host the internet’s most authenticated identity and richest personal preference library — a data moat that could become one of the company’s most valuable assets. Not all the news is rosy: Airbnb’s $2.5 billion bond sale to refinance maturing debt spooked investors enough to knock shares down 4%-plus, and Iceland just passed new short-term rental restrictions, a reminder that governments worldwide aren’t exactly rolling out the welcome mat for Airbnb’s core business.
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Is Kratos Worth 340 Times Earnings? 2:37 pm — KTOS -2.09%
Kratos Defense & Security (KTOS +5.04%) keeps sliding — down another 2% Monday — as Jefferies becomes the seventh analyst to cut its price target since last week’s earnings. To be fair, Jefferies still likes Kratos; it just likes it $5 less than before. Q1 revenue grew 23%, and a book-to-bill ratio of 1.6 means orders are piling up faster than Kratos can fill them. Still, free cash flow was negative $47.3 million.
The valuation is doing a lot of heavy lifting: At 340.0x earnings, with cash still burning, there’s not much room for disappointment. A Foolish take: The growth story here hasn't changed. Motley Fool National Security added to its Kratos position in March, calling it "one of the best growth stories in the defense sector over the next five years and beyond."
Wait, Bloom Energy’s a Space Stock Now? 2:04 pm — BE +12.11%
Bloom Energy (BE +5.42%) jumped more than 10% Monday on what can only be described as "vibes plus NASA." There’s no earnings surprise, no analyst upgrade. Simply a story about NASA testing fuel cells for a moon base. Researchers at Glenn Research Center are experimenting with systems that turn hydrogen and oxygen into electricity, heat, water, and breathable air. Bloom doesn’t build moon bases. Yet...
One giant leap for fuel cell investors: NASA’s lead engineer called fuel cells "ideal" for lunar habitats and rovers, and when the agency eventually needs mass production, it’ll need partners like Bloom. Not on the books today, but circle the lunar calendar: Moon revenue is currently $0 for Bloom, but a permanent Artemis base could make this the weirdest growth catalyst of 2026.
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The High Price of Disney's Peace Deal 1:30 pm -- DIS -3.0%
Walt Disney (DIS +1.58%) is embroiled in a regulatory battle as FCC Commissioner Anna Gomez warns of a "coordinated campaign" to pressure ABC into submission. Republican Chairman Brendan Carr has fast-tracked a rare review of Disney’s eight broadcast licenses — originally set for 2028 — following controversial segments on "The View" and Jimmy Kimmel Live!. This aggressive oversight follows a $15 million settlement Disney paid to the Trump presidential library in late 2024 to resolve separate litigation. With the FCC now probing whether talk shows qualify as "bona fide" news exempt from equal-time rules, the media giant faces an unprecedented threat to its broadcast infrastructure and long-term operating certainty.
Broken Guardrails: The early license review breaks a four-decade streak of regulatory stability, signaling a shift where programming content directly dictates federal broadcast eligibility. The Settlement Trap: Gomez contends that previous financial concessions only "bought time," suggesting a rising cost of compliance that could weigh on Disney’s future cash flows and legal reserves. Today's Lunchtime News 1:35 pm -- GOOG -1.8%
Alphabet (GOOG 1.23%) security researchers said they found the first confirmed case of a cybercrime group using AI to build a hacking tool that can bypass defenses in a widely used system administration application. Google said it has "high confidence" that AI helped discover and weaponize the exploit, marking a real-world arrival of the threat scenario that recently sparked panic over Anthropic's Mythos model.
What happened: The hacking group used an AI model to find a previously unknown zero-day flaw that could bypass multifactor authentication and gain access to internal networks. Google alerted the tool's developer, who patched it before hackers could deploy it. The company declined to name the cybercrime group or the affected software but said the model used was neither Mythos nor Google's own Gemini. Policy response: Anthropic restricted Mythos's release in April, citing national security concerns over its vulnerability discovery capabilities. The White House has since moved to address malicious use of large language models, holding emergency meetings with tech and industry leaders. Google researchers said their findings suggest these threats are already a reality, not a future risk.
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Micron Propels DRAM ETF to Record Speed 12:45 pm -- DRAM +5.0%
The Roundhill Memory ETF (NASDAQ: DRAM) has become the fastest ETF in history to reach $6.5 billion in assets, hitting the milestone in just 36 days and dethroning BlackRock's (BLK +0.80%) iShares Bitcoin Trust. This record-breaking surge is powered by Micron Technology (MU +5.27%), which anchors 27% of the fund. Investors are aggressively piling into the memory supply chain, betting that high-bandwidth memory is the essential "new math" of the AI age. While the fund soared 13% on Friday alone, analysts warn that the industry’s history of boom-bust cycles remains a lurking risk if Western Digital (WDC +3.93%) and others expand capacity too quickly.
Exponential Model Demands: Analysts at D.A. Davidson suggest memory needs scale with AI context lengths; larger models require more chips, creating a self-reinforcing demand loop. Price Target Moonshot: Despite historical volatility, some firms maintain a Buy rating on Micron with a $1,000 price target, implying significant upside from current levels for Seagate Technology (STX +3.40%) and its peers.
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Intel Rises on New Nvidia News 12:05 pm -- INTC +1.8%
Intel (INTC +6.98%) shares climbed Monday after CEO Lip-Bu Tan teased "exciting new products" in development with Nvidia (NVDA +1.31%). The collaboration centers on high-performance data center chips and AI-driven consumer PCs that integrate Nvidia’s RTX graphics into Intel’s silicon. This partnership, bolstered by Nvidia’s $5 billion stake in Intel, is a cornerstone of a massive turnaround that has seen shares surge nearly 500% over the last year. Further fueling the rally, reports indicate Intel has secured a preliminary deal to manufacture chips for Apple (AAPL +1.38%), signaling that its foundry business is finally gaining the scale needed to challenge Taiwan Semiconductor (TSM +2.09%).
The Logic of Autonomous Bots: While GPUs handle heavy AI training, Intel is capturing the "inference" market where its CPUs power the actual actions taken by autonomous AI agents. Foundry Momentum: Intel’s manufacturing arm grew 16% to $5.4 billion last quarter, proving it can attract top-tier rivals like Advanced Micro Devices (AMD +4.77%) and Qualcomm (QCOM +4.27%) as contract customers.
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Chipotle Sticks to Its Core Menu 11:40 am -- CMG -2.4%
Chipotle Mexican Grill (CMG +2.42%) CEO Scott Boatwright is doubling down on operational simplicity to drive long-term value, ruling out "random initiatives" like breakfast or fish tacos. Despite pressure to boost 2026 sales, Boatwright argues that breaking into the crowded breakfast daypart is too risky, while fish tacos are disqualified because the chain famously refuses to use freezers for its ingredients. While the brand is still "innovating back at the ranch" on dessert ideas, the focus remains squarely on maximizing the efficiency of the lunch and dinner rushes that have defined the company since 1993.
Ethos Over Expansion: By rejecting frozen proteins, the company maintains a premium "food with integrity" moat that sets it apart from rivals like McDonald's (MCD +0.94%) or Taco Bell (YUM +1.65%). Operational Discipline: Avoiding menu bloat ensures faster throughput in the assembly line, which remains the primary driver of margin expansion and store-level profitability. Meta AI Accused of Aiding Global Scammers 11:25 am -- META -1.4%
Meta Platforms (META 0.71%) is facing a major legal challenge after Santa Clara County filed a lawsuit alleging the tech giant knowingly profited from fraudulent advertisements. The complaint, representing all California residents, claims Meta earned up to $7 billion annually from "high-risk" scam ads on Facebook and Instagram. Prosecutors allege that leaked documents show Meta implemented "guardrails" to prevent anti-fraud measures from hurting the bottom line. Most concerning for investors, the suit suggests Meta’s generative AI may be assisting unethical marketers and that the company can "adjust the flood" of scam ads to meet specific revenue targets.
Algorithmic Complicity: The lawsuit alleges Meta targeted scam ads at users based on their past clicks, essentially creating an automated pipeline for fraudsters. Internal Conflict: While Meta claims it aggressively fights scams to protect user experience, civil prosecutors argue the company sold protected accounts to middlemen to bypass its own enforcement.
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High Rates Freeze April Home Sales 10:10 am
April home sales stalled, rising just 0.2% and missing analyst expectations of a 3% bounce. The lethargy stems from a sharp mortgage rate spike triggered by the conflict with Iran, pushing the 30-year fixed rate to 6.42%. While the S&P 500 sits at record highs, potential buyers face a record-high median April home price of $417,700. Tight inventory continues to benefit homebuilders like Lennar (LEN +2.95%) and D.R. Horton (DHI +2.50%), as existing homeowners remain "locked in" to lower rates, keeping the secondary market supply at a restrictive 4.4-month level.
Affordability Tug-of-War: Despite price gains, NAR reports that average income growth is outrunning home appreciation, though soaring borrowing costs largely neutralize these wage gains for new entrants.
Cash is King: All-cash deals maintained a 25% share of the market, insulating a quarter of transactions from the volatility seen by mortgage-dependent buyers and companies like Rocket Companies (RKT +3.15%).
Opening Bell 9:35 am
The S&P 500 and the Nasdaq are catching their breath this Monday following a historic six-week winning streak. Early gains were capped as President Trump dismissed Iran's latest peace proposal as "totally unacceptable," reigniting fears of a prolonged conflict. Consequently, West Texas Intermediate futures climbed 1% to over $96 per barrel. Despite the geopolitical friction, investors are leaning on last Friday’s blowout jobs report, where hiring doubled expectations, to support a "secular bull market" thesis. Markets remain near all-time highs as traders weigh a slowing economy against resilient corporate earnings.
Structural Shock Absorbers: Some analysts argue that while high energy prices may dampen growth, deep-seated structural strengths should prevent a total economic derailment. Geopolitical Stalemate: The rejection of Tehran's 14-point memorandum shifts the focus back to potential supply disruptions in the Strait of Hormuz, a key risk factor for global logistics and energy plays. Market indexes
S&P 500
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Top of the Morning 9:25 am -- CVSA flat in pre-market trading
By Jim Gillies
If you've spent any time watching my appearances on Fool24 or are a member of Hidden Gems Canada, where I spend most of my days, you'll know that my "schtick" is the small, the perhaps strange, the misunderstood. Basically, companies that don't get a lot of love around Fooldom aside from me.
One such company reported last week, and let's just say that early results validate that I've chosen to recommend it twice in HG Canada. I'm talking about Covista (CVSA +1.39%), the for-profit education company with a focus on medical professions (nurses, doctors, nurse practitioners, veterinarians). If that company name doesn't seem familiar, you may remember Covista under its prior name, Adtalem Global Education, with the name (and ticker) switch becoming official in February of this year.
The theme from Covista's fiscal third quarter can probably be summarized as, "We did what we said we were going to do."
Happy Monday! MNDY Surges on AI-Driven Efficiency Gain 8:00 am -- MNDY +19.33% in pre-market trading
Work management powerhouse monday.com (MNDY 3.86%) delivered a robust first-quarter beat, reporting revenue of $351.3 million--a 24% year-over-year increase that handily cleared internal and analyst expectations. Leadership highlighted a strategic shift toward consumption-based pricing and the successful rollout of its AI Work Platform as primary catalysts. Perhaps most significant for the long-term investor is the company's newfound operating leverage; CFO Eliran Glazer noted that internal AI productivity gains are now allowing the firm to scale top-line revenue without a corresponding increase in headcount. Despite a 190 basis point drag from foreign exchange, non-GAAP operating margins held steady at 14%, signaling a business that is becoming leaner as it grows more complex.
The Efficiency Inflection Point: By decoupling revenue growth from headcount, the company is demonstrating a software-as-a-service (SaaS) holy grail: widening GAAP operating margins, which doubled to 6% this quarter. Cash Flow Machine: The firm generated over $102 million in adjusted free cash flow, providing a massive capital cushion to further invest in autonomous AI agents that "do the work" for its 250,000+ customers.
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This Morning's Breakfast News 7:30 am -- GOOG -0.65%, NVDA -0.51% in pre-market trading
Alphabet (GOOG 1.23%) is on the verge of becoming the world's largest company, says Bloomberg, while "Big Short" investor Michael Burry warns it's "feeling like the last months of the 1999–2000 bubble." Alphabet stock has climbed around 150% over the past 12 months, nearly twice as far as current market-cap leader Nvidia's (NVDA +1.31%) rise.
"Alphabet holds a significant spot in almost every corner of the AI ecosystem": Luke O'Neill at CooksonPeirce says this combined with the rest of Alphabet's offerings "puts it in a prime position to be the biggest winner of AI." If Nvidia hadn't ended last week with a three-day surge, the two market caps would have been neck and neck Friday. "Stocks are not up or down because of jobs or consumer sentiment": Burry, meanwhile, added "They are going straight up because they have been going straight up" in a Substack post on Friday. All he could hear on financial TV and radio sources was "absolutely non-stop AI."
Cirrus Logic Reaches All-Time High on Outlook 6:45 am -- CRUS +0.77% in pre-market trading
By CMFGouldberg, Home Fool & Ticker Guide
Cirrus Logic (CRUS +1.35%) wrapped up fiscal year 2026 in strong fashion, beating analyst expectations on both revenue and adjusted EPS in Q4. The company crossed the $2 billion annual revenue threshold for the first time, driven primarily by largest customer Apple (AAPL +1.38%) -- which accounted for more than 90% of sales. While that level of customer concentration remains a genuine risk, Cirrus Logic is working to broaden its business, with a fast-growing laptop chip operation, next-generation camera controller chips in development, and a new power management chip being designed in collaboration with Apple for use in facial recognition technology (although this product is still roughly two years from reaching the market). Adding to investor optimism, the company's guidance for the current quarter came in well above what analysts had been expecting, sending the stock to new all-time highs. For investors, the primary concern (with apologies to the Talking Heads) is the same as it ever was: Can Cirrus Logic continue to execute at a high level for Apple while also building out new revenue streams that could eventually reduce its dependence on that single relationship? I'll also be keeping an eye on whether Cirrus can manage rising R&D costs and potential tariff headwinds without sacrificing its healthy profit margins and free cash flow.
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Mindset Monday: Don't Monitor Volatile Stocks Too Often 6:00 am -- UPST +0.10% in pre-market trading
Member CandiceLee recently wrote on the Hidden Gems Primary Database in relation to Upstart (UPST 0.23%): "I have no idea how to understand any of it, and that's exactly why I bought into TMF lol. I am a complete dummy at this so I have to trust TMF. That is why I am here and also why I get distressed and confused."
Home Fool TMFVicki replied with the following:
"Are there companies that you do understand like Starbucks (SBUX +3.12%) or Costco (COST 0.47%) or Apple (AAPL +1.38%)? Do you own any of these? We recommend all three in Stock Advisor.
Not understanding how a finance company works, particularly one that is using AI to determine whether it should offer someone a loan and at what percentage rate, does not make anyone a dummy. It is a specialized field. While it is OK to invest in companies you don't understand, your level of distress makes it sound like maybe you have too large a position? Being able to sleep at night is important.
Upstart is a young company. It is competing against a lot of big companies. It is making progress. It might be the kind of company that you don't want to check in on too often. The stock price is going to move around on lots of things that aren't news about the company."
Today's Take: CEOs Who Play the Long Game 5:10 am -- NET +0.60% in pre-market trading
Here's a sneak preview, but head to the article to add your vote for the CEO that plays the long game the best, or to submit questions to any of the featured analysts today!
By Jason Moser
Team Rule Breakers
Cloudflare (NET +3.19%) co-founder and CEO Matthew Prince seems 100% committed to the long game. One quick glance at the financials might scare many away. The company has no GAAP profits and even free cash flow takes a hit thanks to stock-based compensation. But once you realize that's by design, then it starts to make a bit more sense. And we can't ignore the fact that the company has grown revenue at a 38% annualized rate over the past five years. He may rub some tech leaders the wrong way with his focus on the internet as an open, decentralized space (as opposed to being controlled by "walled gardens"), but the man has vision and drive. I've owned shares since 2021 and hope to own them for years to come.
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Switch 2 Price Hike Stalls Nintendo Rally 5:00 am -- NTDOY -11.29%
Nintendo (NTDOY +0.27%) shares tumbled more than 11% on Monday after the gaming giant announced a surprise price hike for the Switch 2 and issued a conservative forecast for the year ahead. In response to skyrocketing memory chip costs, the company will raise prices in Japan by ¥10,000 on May 25, followed by a $50 increase in the U.S. starting September 1. While the console sold a record 19.86 million units in its first year, Nintendo expects hardware sales to decline to 16.5 million units for fiscal 2027. Investors are increasingly wary that a lack of confirmed AAA blockbuster titles, combined with higher entry costs for casual gamers, could stall the platform's momentum in its critical second year.
Margin Defense over Volume: Management is prioritizing profitability over unit growth by passing off rising component costs to consumers, a risky move as peer Sony (SONY +1.54%) maintains more aggressive pricing for the aging PlayStation 5. The "Bar is Low" Strategy: Despite the sell-off, some analysts suggest the downbeat guidance is a defensive play, noting that Nintendo has beaten its initial operating profit forecasts for four consecutive years.
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Before the Opening Bell 4:05 am
Stock futures retreated Monday morning as hopes for a swift end to the Iran conflict evaporated following a sharp rebuke from the White House. President Trump dismissed Tehran's revised peace proposal--which reportedly demanded war reparations and full control of the Strait of Hormuz--as "totally unacceptable," effectively dashing the "peace dividend" optimism that drove indices to record highs last Friday. In response, Brent crude surged 4.2% to $105.57 per barrel, reigniting inflation fears even as the latest U.S. labor data showed a surprisingly resilient 115,000 new jobs for April. While tech-heavy markets in Asia remained buoyed by the ongoing artificial intelligence boom, the broader global outlook has shifted back to a "higher-for-longer" stance on energy costs and interest rates.
Moderna Gains Amid Hantavirus Vaccine Interest 4:00 am -- MRNA +3.99% in pre-market trading
Moderna (MRNA +6.33%) shares rose following renewed attention to potential mRNA-based hantavirus vaccine development. The interest comes after reports of a hantavirus outbreak on the MV Hondius cruise ship from Argentina to Cabo Verde highlighted the lack of approved human vaccines for the virus.
Unconfirmed partnerships drive speculation: Online reports and patent discussions have linked Moderna to early stage mRNA hantavirus research, potentially involving academic and government partners, though detailed program updates have not been widely publicized by the company. Biotech sector benefits from outbreak concerns: The stock gained ground amid broader vaccine sector interest following the cruise ship outbreak, with investors focusing on companies positioned to address emerging infectious disease threats through rapid mRNA platform deployment.
Exciting New Feature Figure Available for Pre-Order May 15 Ahead of Late-Summer Launch
Nintendo and Illumination’s record-shattering global blockbuster,
The Super Mario Galaxy Movie, is in theaters now
SANTA MONICA, Calif., May 15, 2026 (GLOBE NEWSWIRE) -- JAKKS Pacific, Inc. (NASDAQ: JAKK), in collaboration with Universal Products & Experiences, Illumination and Nintendo, will launch the pre-sale of its Chomping Wonder Bowser Jr. feature figure, inspired by Nintendo and Illumination’s record-shattering worldwide phenomenon, The Super Mario Galaxy Movie. The interactive figure will be available for pre-order at Target and Smyths beginning May 15, 2026, ahead of the next product rollout hitting shelves in late summer 2026.
Standing over 8 inches tall, Chomping Wonder Bowser Jr. delivers dynamic, action-packed fun with 13 points of articulation and a signature chomping motion activated by pushing his shell forward. The figure also includes a multi-head paint brush with swappable tips including a brush, axe, mace and arrowhead, allowing fans to recreate epic battle moments. A water-reveal feature brings added interactivity, as users can use the brush tip to reveal ink splatter effects again and again.
The launch comes as excitement around The Super Mario Galaxy Movie continues to build. The film has become one of the highest-grossing releases of 2026, reflecting the franchise’s enduring popularity and cross-generational appeal.
JAKKS Pacific’s The Super Mario Galaxy Movie product line has already demonstrated strong performance. Following the successful initial launch in Q1, top-selling items included the 5-inch Figures, Yoshi Egg Playset and 9-inch Plush, highlighting strong fan demand for both collectible figures and interactive play experiences.
Building on that momentum, new Fall offerings include:
Chomping Wonder Bowser Jr. Feature Figure [Target and Smyths exclusive]Mario Riding Yoshi Feature Figure [Walmart exclusive]Premium Figures w/ Accessories: Flying Mario, Cloud Luigi, Princess Peach, and BowserDeluxe Wonder Bowser Jr. Planet playset w/ Mini Bowser Jr. and Clown CarMinus World diorama with exclusive Mini Wart and Penguin Toad figuresMini-scale figures: Flying Mario, Cloud Luigi, and RosalinaPull-back vehicles: Yoshi on Motorcycle and Bowser Jr. in Clown Car [Walmart exclusive]9-inch plush: Flying Mario, Cloud Luigi and Rosalina The Chomping Wonder Bowser Jr. will be available for pre-order at Target and Smyths beginning May 15, 2026, with additional products arriving at major retailers nationwide later this summer.
About Nintendo + Illumination’s The Super Mario Galaxy Movie
Following the global phenomenon that brought The Super Mario Bros. to the big screen in 2023 and earned more than $1.3 billion, Illumination and Nintendo reunite for an all-new, action-packed chapter: The Super Mario Galaxy Movie.
After settling into their new life in the Mushroom Kingdom, Mario (Chris Pratt) and Luigi (Charlie Day) are drawn back into action when a mysterious call for help points toward the unexplored past of Princess Peach (Golden Globe winner Anya Taylor-Joy). The mission pulls Mario and Luigi—and their new family of friends—off familiar ground, launching a sweeping intergalactic journey across new worlds and with unexpected alliances.
The film reunites the all-star original cast, including Golden Globe nominee Jack Black (Jumanji films) as Bowser; Emmy winner Keegan-Michael Key (The Lion King) as Toad; and Emmy nominee Kevin Michael Richardson (American Dad!) as Kamek. They are joined by new cast members including Emmy Award winner Benny Safdie (Oppenheimer) as Bowser Jr.; Emmy and Grammy winner Donald Glover as Yoshi; Emmy and Golden Globe nominee Issa Rae as Honey Queen, Luis Guzmán as Wart, and Academy Award® winner Brie Larson (Captain Marvel) as Rosalina.
The film is directed by returning Golden Globe nominated filmmakers Aaron Horvath and Michael Jelenic (collaborators on Teen Titans Go!, Teen Titans Go! To the Movies) and it is written by returning screenwriter Matthew Fogel (Minions: The Rise of Gru), with Emmy Award nominee Brian Tyler (Fast X) returning to compose the score.
From Nintendo and Illumination—creator of the global blockbuster Despicable Me, Minions, Sing and The Secret Life of Pets franchises—The Super Mario Galaxy Movie is produced by Illumination’s Academy Award® nominated founder and CEO Chris Meledandri, p.g.a., and by Nintendo’s Representative Director and Fellow Shigeru Miyamoto, the creator of Mario.
About Illumination
Illumination, founded by Chris Meledandri in 2007, is one of the entertainment industry's leading producers of event-animated films, including Despicable Me—the most successful animated franchise in cinematic history—as well as the record-breaking The Super Mario Galaxy Movie, The Super Mario Bros. Movie, Dr. Seuss' The Lorax, Dr. Seuss' The Grinch, Migration, and The Secret Life of Pets and Sing films. Illumination's iconic, beloved franchises—infused with memorable and distinct characters, global appeal and cultural relevance—have grossed more than $11 billion worldwide. Illumination has an exclusive financing and distribution partnership with Universal Pictures.
About Nintendo
Nintendo Co., Ltd., headquartered in Kyoto, Japan, has been providing a wide range of entertainment products and experiences since its founding in 1889, beginning with the manufacture and sale of Hanafuda playing cards.
Since the 1983 release of the Family Computer (Famicom) system in Japan, and continuing through Nintendo Switch 2, Nintendo’s focus has been the development, manufacturing, and sale of its gaming systems and software. To date, Nintendo has sold more than 5.9 billion video games and over 860 million hardware units globally, and has created franchises such as Mario™, Donkey Kong™, The Legend of Zelda™, Pokémon™, Metroid™, Kirby™, Animal Crossing™, Pikmin™, and Splatoon™.
Nintendo strives to expand the number of people who have access to its characters and worlds. Its continuing mission is to put smiles on the faces of everyone it touches with unique entertainment experiences, centered on its integrated video game hardware and software products.
About Universal Products & Experiences (UP&E)
Universal Products & Experiences (UP&E) globally drives the expansion and elevation of NBCUniversal’s iconic collection of brands, intellectual properties, characters, and stories based on the company’s extensive portfolio of properties created by Universal Pictures, Illumination, DreamWorks Animation and NBCUniversal Television and Streaming. The division executes this through innovative physical and digital products, as well as engaging retail and product experiences across our expansive global theme park destinations (for both owned and third-party IP), location-based venues, e-commerce product platforms, and retailers around the world. Along with global brand strategy and creative, UP&E’s lines of business include Consumer Products and Games, along with Theme Parks Products & Retail. UP&E is a division of Universal Destinations & Experiences, part of NBCUniversal, a subsidiary of Comcast Corporation. More information is available at universalproductsexperiences.com.
About JAKKS Pacific, Inc.
JAKKS Pacific, Inc. is a leading designer, manufacturer and marketer of toys and consumer products sold throughout the world, with its headquarters in Santa Monica, California. JAKKS Pacific’s popular proprietary brands include Disguise®, Fly Wheels®, Charming™, Kidtopia™, Moose Mountain®, Maui®, ReDo® Skateboard Co., Sky Ball®, and Xtreme Power Dozer® as well as a wide range of entertainment-inspired products featuring premier licensed properties. Through their products and charitable donations, JAKKS is helping to make a positive impact on the lives of children. Visit us at www.jakks.com and follow us on Instagram (@jakkspacific.toys), X (@jakkstoys), YouTube (@JAKKSPacific), Facebook (@jakkspacific.toys) and LinkedIn (JAKKS Pacific).
Nintendo delivered record-breaking Switch 2 hardware and software sales, surpassing revised forecasts and cementing its market leadership. Nintendo projects lower Switch 2 sales and software units for FY2027 due to economic volatility and a $50 price increase. Robust cash reserves of $13.97B and minimal debt provide flexibility for innovation, dividends, and resilience against rising DRAM costs.
Nintendo Co. NTDOY rallied as much as 6.8% in Tokyo on Tuesday, delivering its biggest gain in two months as investors rotated away from richly valued AI-linked trades and looked for value in beaten-down parts of the market. The move gave Nintendo its third straight day of gains, its longest winning streak since mid-March, and came as Japanese video game shares broadly rebounded. Bandai Namco Holdings and Konami Group both climbed more than 9%, showing how quickly investor attention may be shifting from AI winners toward gaming names that had been under pressure.
The rebound comes after months of weakness tied to a memory chip supply crunch and concerns that tighter component availability could hurt hardware sales. Nintendo has also been viewed as one of the market's AI losers, especially after recently posting its longest monthly losing streak in 10 years. Amir Anvarzadeh of Asymmetric Advisors said Tuesday's rally was part of a rotation out of AI technology and into beaten-up names, adding that the move reflected growing caution around massive AI gains that may not be sustainable.
That caution is building ahead of Nvidia's NVDA earnings on Wednesday in the US, with Invesco's Tomo Kinoshita saying some investors may be temporarily selling AI names before the results. Still, Nintendo's rally may not yet signal a fundamental revaluation. Anvarzadeh warned that concerns around costlier memory and a softer upcoming game pipeline continue to weigh on the outlook, even after Tuesday's jump. Nintendo shares remain down more than 28% so far in 2026 and trade around ¥7,600, making the move look more like a possible AI-fatigue rotation than a full reset of investor expectations.
Forget Bitcoin, high-speed memory is the new digital gold, and companies that supply data storage have seen their stock prices explode this year.
Memory has become a crucial bottleneck as AI training programs produce massive amounts of data, and memory companies like Micron Technology Inc. NASDAQ: MU can’t keep up with their insatiable demand.
But memory storage has a finite supply, and hyperscalers are siphoning that supply from companies accustomed to a cyclical business.
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Video game companies re one group that have suddenly found themselves as have-nots, especially those that manufacture memory-needy gaming consoles, which sit in the crosshairs of one of the biggest trends in the tech sector.
DRAM and NAND memory, key components in gaming console construction, have doubled since last year, and the major suppliers are reporting capacity shortages into 2028. High-performance memory is a must for next-gen consoles, and it can’t be engineered out of the bill of materials.
The following three companies are directly or indirectly affected by the memory shortage. And considering how much capex hyperscalers are committing, investors may want to avoid these names until the memory shortage abates.
Nintendo: New Hardware Launching Directly Into the ShortageNintendo Today
$11.06 -0.04 (-0.36%)
As of 01:31 PM Eastern
52-Week Range$10.39▼
$24.92Dividend Yield0.36%
P/E Ratio18.43
Nintendo Co. Ltd. OTCMKTS: NTDOY is most exposed to memory shortages as it lacks diversification beyond the console market and has a new device early in its lifecycle.
The Switch 2 was released in June last year at $449, making it the most expensive console the company had ever released.
CEO Doug Bowser (yes, Bowser runs Nintendo) defended the price point, citing the console’s premium features and high demand.
But now the console is facing unexpected headwinds due to higher memory costs, forcing management to announce a Sept. 1 price hike to $499.
The timing of the price hike couldn’t be worse. Nintendo’s margins were already under pressure from tariffs, and now the company is forced to increase prices on its already expensive next-gen console just 15 months after launch.
Nintendo’s typical console launch strategy involves promotions and discounts to build a customer base, and then selling high-margin software to that wide base. But the company is projecting Switch sales to drop 17% year-over-year (YOY) from fiscal 2026 to 2027, with overall net sales declining 11% and net profits declining 27%. With margins already under pressure, Nintendo has no choice but to pass on expanding costs to customers.
NTDOY shares have been in a steady downtrend since the start of the year, highlighted by December’s Death Cross that reinforced resistance at the 50-day moving average. All attempted breakouts have been thwarted, and the Relative Strength Index (RSI) remains trapped in a bearish cycle.
Sony: Gaming Segment Margins Getting Tougher to DefendSony Today
$21.10 +0.33 (+1.61%)
As of 01:56 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$19.63▼
$30.34Dividend Yield0.47%
Price Target$22.00
Sony Group Corp. NYSE: SONY is far more diversified than Nintendo thanks to its music, movies, and financial services platforms.
But the gaming segment is typically a profit machine, and Sony is feeling the heat after two price increases: one for the PlayStation 5 family of consoles and another for new PlayStation Plus subscribers.
Like Nintendo, PlayStation consoles are a lower-margin product that drives recurring high-margin software and subscription sales.
And while the PS5 is an aging product, the memory shortage is forcing management to consider delaying the PlayStation 6 release.
Sony stock shows some signs of a revival, but the long-term technical trend remains murky. The Moving Average Convergence Divergence (MACD) indicator is volatile but trending up, and the share price recently overtook the 50-day moving average. However, January’s Death Cross still looms large, and the MACD looks to be forming a new bearish crossover that could see the share price re-challenge the 50-day MA.
This is a fair market value price provided by Massive. Learn more.
52-Week Range$187.63▼
$264.79Price Target$287.06
Take-Two Interactive Software Inc. (NASDAQ: TTWO doesn’t purchase any memory, and its products face minimal margin compression from sky-high memory prices.
Instead, Take-Two Interactive is the largest publicly traded game developer, responsible for popular titles like Grand Theft Auto and Red Dead Redemption.
This year, the company is pushing all in with Grand Theft Auto 6, a long-awaited sequel that’s finally out of Development Hell.
Take-Two is planning a Nov. 19 release for GTA6 on PlayStation and Xbox consoles.
But if price hikes continue to push consoles out of reach for consumers, the launch could be softer than anticipated.
The company projects fiscal 2027 revenue between $7.9 billion and $8.1 billion, with nearly all of it expected to come from GTA6 sales. Any misfire on this launch could be bad news for a stock that already trades at 34x forward earnings and 6x sales.
Following a Death Cross and massive drawdown earlier this year, the stock has actually rebounded nearly 15% since the end of March. But the rebound appears headed for rejection as the price has failed to sustain a breakout above the 200-day moving average. The RSI has also dipped into bearish territory, and the stock now needs to defend the 50-day MA or risk a further decline.
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Serkan Toto, CEO of Kantan Games, says despite beating its own sales targets, investor expectations have been sky high for Nintendo and its Switch 2 console. He explains that investors are also watching the software that Nintendo is launching and that the company needs to pump out as many first-party blockbusters as possible over the next couple of months, and in the years ahead.
Nintendo's Switch 2 has proven demand, selling nearly 20 million units and becoming the company's fastest-selling console launch ever. Investors are focusing on slowing hardware growth while overlooking Nintendo's expanding ecosystem and software monetization strategy. Nintendo continues to report strong software momentum, rising digital sales, and healthy engagement across its 129 million annual playing users.
Nintendo said Monday that it would pay a fine of 35 million euros ($40 million) to settle a French claim over faulty controllers on its Switch consoles.
HomeInvestingYour Digital SelfYour Digital SelfWhy the coming $1,000 videogame console will squeeze hardware stocksLast Updated: June 9, 2026 at 4:16 p.m. ET
First Published: June 8, 2026 at 2:21 p.m. ET
Most of the artificial-intelligence story gets told from the supplier side, where the numbers are spectacular. On the other side are the companies that buy that memory and build it into things they sell: game consoles, phones, laptops and the components inside a desktop computer. They did not create the shortage, but their products are being repriced by it.
For an investor, the question is no longer whether a company is involved with AI. It is which side of the data center a company sells to. The memory and storage makers are printing money. The hardware companies that depend on them are eating the cost, and the market is only starting to tell the two apart.
A person holds a Nintendo Switch 2 game console's box as Nintendo starts selling the new consoles globally, at an electronics store in Tokyo, Japan, June 5, 2025. REUTERS/Issei Kato/File Photo Purchase Licensing Rights, opens new tab
TOKYO, June 10 (Reuters) - Nintendo's (7974.T), opens new tab shares fell 7.5% on Wednesday after the company's Nintendo Direct presentation of forthcoming games lacked titles from top franchises such as "Super Mario".
The Kyoto-based company's stock price has been hammered by concerns over a lack of high-profile games to build momentum for the Switch 2 gaming device.
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The shares are down around a third year-to-date.
The lack of a "mainline 3D Mario" for this year's holiday shopping season is "commercially meaningful", Jefferies analyst Atul Goyal wrote in a client note.
The Switch 2 launched last June with titles including "Mario Kart World" and later "Donkey Kong Bananza".
"Year 2 now enters the holiday window without a franchise title of comparable pull," Goyal wrote.
Last month Nintendo hiked Switch 2 prices as it grapples with a memory chip price boom, which is also seen as a risk to sales momentum due to its price-sensitive consumer base.
Reporting by Sam Nussey; Editing by Christopher Cushing
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Capri Holdings is rated a 'buy' as its turnaround gains traction, with the Versace sale stabilizing the balance sheet and debt now manageable. Jimmy Choo demonstrates sustained growth and margin strength, while Michael Kors remains challenged by entrenched brand perception and structural decline. Management's strategy focuses on store renovations, disciplined pricing, and targeting younger consumers, aiming for margin recovery from 6.6% to 10% EBITDA.
LONDON--(BUSINESS WIRE)--Capri Holdings Limited (NYSE: CPRI) today announced that it plans to report its fourth quarter and fiscal year 2026 financial results on Wednesday, May 27, 2026, at approximately 6:45 a.m. ET. The Company also plans to hold a conference call to discuss its financial results the same day at 8:30 a.m. ET. Those who wish to participate in the call may do so by dialing (877) 704-4453 or (201) 389-0920 for international callers, conference ID 13756114. A live webcast of the.
As the quarterly earnings season gathers pace, investor focus is turning toward the apparel space, where companies are showing resilience despite cautious discretionary spending, tariff-related cost pressures and fast-changing fashion preferences. Consumers remain selective, but demand has held up for brands offering compelling assortments, strong value propositions and differentiated customer engagement.
Per the latest Zacks Earnings Outlook, the Retail – Wholesale sector (which houses Retail – Apparel and Shoes stocks) is likely to witness bottom-line growth of 2% this earnings season, with revenues expected to increase 7.9%.
Key Apparel Trends This Earnings SeasonThis earnings season, several apparel players are benefiting from improved product acceptance, disciplined inventory management and lower promotional activity. Many companies have been driving higher full-price selling, refining pricing architectures and strengthening brand relevance through targeted marketing, social media engagement and product innovation. These efforts are helping support merchandise margins and improve overall business quality despite industry-wide cost pressures.
Tariffs and sourcing-related expenses remain key watchpoints. Companies with diversified sourcing strategies, selective pricing actions and tighter expense controls appear better positioned to protect profitability. At the same time, supply-chain efficiencies, better inventory alignment and reduced markdown dependency are helping stabilize margin trends heading into earnings.
Another encouraging trend is the growing emphasis on customer engagement and category expansion. Apparel retailers are increasingly leveraging loyalty programs, digital capabilities, influencer marketing and localized assortments to deepen customer relationships and drive traffic. Several players are also pursuing opportunities in adjacent categories, international markets and newer customer cohorts, particularly younger shoppers seeking trend-right products at accessible price points.
Although macroeconomic uncertainty and uneven consumer demand continue to create volatility, operational discipline and sharper execution are emerging as important differentiators. Companies balancing innovation, inventory control and margin management may be better positioned to outperform expectations this season.
Finding the Right StocksIdentifying likely earnings outperformers is not easy, but our proprietary methodology helps narrow the field. With the help of the Zacks Stock Screener, we have picked a few apparel stocks that appear well-positioned to surpass the Zacks Consensus Estimate this earnings season.
Our research shows that for stocks with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), the chance of an earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
3 Stocks Primed for Earnings BeatFIGS, Inc. (FIGS - Free Report) enters the earnings season with strong customer momentum, international growth and improving execution. Strength in scrub wear, layering systems and emerging categories such as outerwear, compression socks and loungewear is supporting growth. FIGS is also benefiting from effective marketing and rising brand engagement. Disciplined inventory management, fulfillment efficiencies and reduced promotions are aiding profitability despite tariff pressure.
FIGS, Inc. Price, Consensus and EPS SurpriseWith product innovation, community hubs and deeper healthcare-professional engagement, FIGS appears well-positioned heading into earnings. The company currently has an Earnings ESP of +100.00% and a Zacks Rank #1. The Zacks Consensus Estimate for first-quarter fiscal 2026 earnings per share (EPS) has remained unchanged at 1 cent in the past 30 days. FIGS has a trailing four-quarter earnings surprise of 187.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Gap, Inc. (GAP - Free Report) appears well-positioned heading into earnings, backed by sustained brand momentum, disciplined execution and healthier merchandise productivity. The company delivered its eighth straight quarter of positive comparable sales in the fourth quarter of fiscal 2025, led by strength across Gap, Old Navy and Banana Republic. Management highlighted traction from product innovation, culturally relevant marketing and reduced discounting, which supported higher average unit retails and solid margin trends.
Gap brand continues to benefit from Gen Z engagement, denim gains and improved store formats, while Old Navy remains strong in activewear, denim and kids. Cost discipline, sourcing actions and inventory control further support profitability, making GAP favorably placed this earnings season. Gap currently has an Earnings ESP of +25.11% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter fiscal 2026 EPS has risen by 2 cents to 39 cents in the past 30 days. GAP has a trailing four-quarter earnings surprise of 6.6%, on average.
Capri Holdings Limited (CPRI - Free Report) looks well-placed as turnaround efforts at Michael Kors and Jimmy Choo gain traction. On its third-quarter fiscal 2026 earnings call, management cited sequential improvement in retail trends, stronger full-price sell-throughs and lower promotional activity, which supported underlying gross margin expansion despite tariff pressure. Michael Kors is benefiting from refreshed assortments, improved pricing architecture and better response to newer styles, while Jimmy Choo is seeing momentum in accessories and casual footwear.
Elevated marketing, influencer engagement and store renovations are also strengthening brand desirability. With better execution, a healthier sales mix and disciplined cost control, CPRI appears positioned for a solid earnings show. Capri Holdings currently has an Earnings ESP of +20.37% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter fiscal 2026 EPS has remained unchanged at 11 cents in the past 30 days. CPRI delivered an earnings surprise of 3.85% in the last reported quarter.
The upcoming report from Capri Holdings (CPRI - Free Report) is expected to reveal quarterly earnings of $0.11 per share, indicating an increase of 102.2% compared to the year-ago period. Analysts forecast revenues of $803.66 million, representing a decline of 22.4% year over year.
Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted upward by 3.1% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.
Before a company announces its earnings, it is essential to take into account any changes made to earnings estimates. This is a valuable factor in predicting the potential reactions of investors toward the stock. Empirical research has consistently shown a strong correlation between trends in earnings estimate revisions and the short-term price performance of a stock.
While investors typically use consensus earnings and revenue estimates as a yardstick to evaluate the company's quarterly performance, scrutinizing analysts' projections for some of the company's key metrics can offer a more comprehensive perspective.
Bearing this in mind, let's now explore the average estimates of specific Capri Holdings metrics that are commonly monitored and projected by Wall Street analysts.
The consensus estimate for 'Revenue- Jimmy Choo' stands at $137.84 million. The estimate indicates a change of +3.6% from the prior-year quarter.
It is projected by analysts that the 'Revenue- Michael Kors' will reach $665.82 million. The estimate suggests a change of -4.1% year over year.
The average prediction of analysts places 'Geographic Revenue- Americas (United States, Canada and Latin America)' at $460.65 million. The estimate points to a change of -17.9% from the year-ago quarter.
Analysts forecast 'Geographic Revenue- Asia' to reach $109.06 million. The estimate indicates a change of -36.6% from the prior-year quarter.
According to the collective judgment of analysts, 'Geographic Revenue- EMEA' should come in at $237.29 million. The estimate points to a change of -21.4% from the year-ago quarter.
The collective assessment of analysts points to an estimated 'Income from operations- Michael Kors' of $27.09 million. The estimate is in contrast to the year-ago figure of $32.00 million.
View all Key Company Metrics for Capri Holdings here>>>
Over the past month, Capri Holdings shares have recorded returns of -14.4% versus the Zacks S&P 500 composite's +4.6% change. Based on its Zacks Rank #3 (Hold), CPRI will likely exhibit a performance that aligns with the overall market in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
On May 21, 2026, Capri Holdings Ltd CPRI shares rose 3.0%, closing at $18.38. Despite today's positive movement, the stock has experienced significant volatility, with a 52-week range between $16.22 and $28.27.
GF Value™ verdict: Current price of $18.38 represents an 18.7% discount to the GF Value™ of $22.60.GF Score™ is 69/100, indicating an above-average rating for the stock.Insider activity shows that insiders have purchased $1.0M worth of shares in the last three months, with no selling reported. Is CPRI Overvalued or Undervalued? Capri Holdings Ltd's current trading price of $18.38 is significantly below the GF Value™ of $22.60, suggesting that the stock is undervalued by 18.7%. This disparity creates a potential opportunity for investors, as the margin of safety indicates that the stock may be priced lower than its intrinsic value. The GF Valuation label of "Modestly Undervalued" further supports this assertion, implying that there is room for price appreciation if market conditions improve or if the company executes its strategic plans effectively.
However, it is essential to consider the risks associated with this undervaluation. The stock has shown volatility, with a year-to-date decline of 24.7% and a three-year drop of 22.5%. While the current price presents an attractive entry point based on the GF Value™, potential investors should remain cautious due to the company's financial strength rating of 3/10, which indicates possible underlying issues that could affect future performance. GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.
How Does CPRI's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 10.1x 14.3x Currently, Capri Holdings Ltd is trading at a forward P/E of 10.1x, which is notably lower than its 5-year median P/E of 14.3x. This analysis aligns with the GF Value™ verdict, indicating that the stock is undervalued compared to its historical valuation metrics. The lower current P/E suggests that the market may not be fully pricing in the company's potential for recovery, adding further credence to the opportunity highlighted by the GF Value™ assessment.
What Does CPRI's GF Score™ Tell Us? Metric Rating GF Score™ 69/100 Financial Strength 3/10 Profitability 6/10 Growth 3/10 Valuation 8/10 Momentum 7/10 The GF Score™ of 69/100 indicates that Capri Holdings Ltd is positioned above average compared to its peers. The strongest aspect is the Valuation rank of 8/10, suggesting that the stock is attractively priced relative to its intrinsic value. Conversely, the Financial Strength score of 3/10 and Growth rank of 3/10 highlight areas of concern, indicating potential weaknesses that could impact long-term performance and stability. Overall, while the valuation metrics are favorable, the weaker financial and growth indicators warrant careful consideration.
What Are Insiders Doing with CPRI Stock? Recent insider activity for Capri Holdings Ltd reflects a bullish sentiment, as insiders have purchased $1.0M worth of shares in the last three months without any selling reported. This pattern of insider buying can often be interpreted as a sign of confidence in the company's future performance and prospects. Insiders typically have a deeper understanding of the company's operations and may be more aware of forthcoming developments that could positively impact the stock price.
What This Means for Investors Based on the GF Value™ assessment, Capri Holdings Ltd CPRI is currently undervalued, presenting a potential opportunity for investors seeking exposure in the retail sector. However, it is crucial to remain aware of the company's financial health and market volatility that may impact future performance.
For the complete analysis, visit the Capri Holdings Ltd CPRI stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is CPRI's GF Score™?
CPRI's GF Score™ is 69/100, indicating it is rated above average compared to its peers, suggesting potential for higher long-term returns.
Is CPRI overvalued or undervalued?
According to the GF Value™, CPRI is currently undervalued with a price of $18.38 compared to its intrinsic value estimate of $22.60.
What is CPRI's P/E ratio?
CPRI's forward P/E ratio is 10.1x, which is below its 5-year median P/E of 14.3x, indicating that the stock may be undervalued based on historical trading multiples.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
LONDON--(BUSINESS WIRE)--Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today announced its financial results for the fourth quarter and full year Fiscal 2026 ended March 28, 2026. Fourth Quarter Fiscal 2026 Highlights from Continuing Operations Revenue decreased 3.7% on a reported basis and 7.0% in constant currency Operating margin of (3.4)%; adjusted operating margin of (0.1)% Loss per share of $(0.01); adjusted earnings per share of $0.22 John D. Idol, the Company's Chai.
The logo of Michael Kors is seen on an outlet store in Metzingen, Germany, June 16, 2017. REUTERS/Michaela Rehle Purchase Licensing Rights, opens new tab
SummaryCompaniesForecasts annual sales in line with estimatesMichael Kors sales drop for 14th straight quarterExpects to recover all IEEPA tariffsCompany bets on full-price sales to revive Michael KorsMay 27 (Reuters) - Capri Holdings (CPRI.N), opens new tab forecast another quarter of declining sales on Wednesday but provided an upbeat annual profit target as it bets on a turnaround strategy focused on reviving demand for its Michael Kors brand.
Capri is trying to draw in a broader customer base, especially younger and wealthier shoppers, who continue to spend on nice-to-have items such as handbags despite inflationary pressures from higher gas and food costs.
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The company has been pulling back on promotions and selling handbags and apparel at full price to help drive a reset at Michael Kors, executives said in a post-earnings call.
It is also shifting its product mix, particularly towards smaller handbags and more casual footwear, which it said was resonating more with younger shoppers.
"A premium brand like Michael Kors must avoid excessive discounting or it degrades the value of the brand," said David Swartz, analyst at Morningstar, adding that even with higher prices, Michael Kors products are priced much lower than those of luxury brands.
Capri reported another quarterly decline for the Michael Kors brand, which makes up the bulk of its sales. Revenue fell 5.5% to $656 million, the company said.
Michael Kors has faced criticism in recent years for its lack of design innovation and consecutive quarters of declining sales, in contrast to handbag rival Coach, owned by Tapestry (TPR.N), opens new tab, which analysts say benefits from stronger brand power.
Capri expects first-quarter total revenue of about $750 million, compared with an estimate of $789.7 million, according to data compiled by LSEG. The company's shares reversed course after early premarket gains and fell about 2%.
"There is enough demand for both brands (Jimmy Choo and Michael Kors). I think investors were discouraged that the Q1 sales outlook was not higher, but it's a long process," Swartz said.
Failing to capitalize on the inclusion of the Italian brand Versace in its portfolio, the company sold it to Prada last year, highlighting Capri's push to raise cash and pay down its debt.
Capri reports fourteen straight quarters of revenue decline, with declining sales at its key revenue driving brand, Michael KorsCapri's fourth-quarter revenue of $796 million was largely in line with expectations, but adjusted earnings per share of 22 cents topped an estimate of 11 cents per share, while gross margin also grew.
It plans to recover all tariffs paid under the International Emergency Economic Powers Act as of March 28 and has recorded a refund of $65 million, it said.
The company expects fiscal year 2027 profit per share of about $2.15, compared to analysts' expectation of $1.83.
Reporting by Sanskriti Shekhar and Juveria Tabassum in Bengaluru and Danielle Kaye in New York; Editing by Pooja Desai
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Capri Holdings (CPRI - Free Report) came out with quarterly earnings of $0.22 per share, beating the Zacks Consensus Estimate of $0.11 per share. This compares to a loss of $4.9 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +103.70%. A quarter ago, it was expected that this luxury retailer would post earnings of $0.78 per share when it actually produced earnings of $0.81, delivering a surprise of +3.85%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Capri Holdings, which belongs to the Zacks Retail - Apparel and Shoes industry, posted revenues of $796 million for the quarter ended March 2026, missing the Zacks Consensus Estimate by 0.95%. This compares to year-ago revenues of $1.04 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Capri Holdings shares have lost about 24.2% since the beginning of the year versus the S&P 500's gain of 9.8%.
What's Next for Capri Holdings?While Capri Holdings has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Capri Holdings was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.33 on $799.8 million in revenues for the coming quarter and $1.80 on $3.55 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Apparel and Shoes is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the same industry, Vera Bradley (VRA - Free Report) , is yet to report results for the quarter ended April 2026.
This handbag and accessories company is expected to post quarterly loss of $0.33 per share in its upcoming report, which represents a year-over-year change of +8.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Vera Bradley's revenues are expected to be $49.12 million, down 4.9% from the year-ago quarter.
For the quarter ended March 2026, Capri Holdings (CPRI - Free Report) reported revenue of $796 million, down 23.1% over the same period last year. EPS came in at $0.22, compared to -$4.90 in the year-ago quarter.
The reported revenue represents a surprise of -0.95% over the Zacks Consensus Estimate of $803.66 million. With the consensus EPS estimate being $0.11, the EPS surprise was +103.7%.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Capri Holdings performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Revenue- Jimmy Choo: $140 million compared to the $137.84 million average estimate based on three analysts. The reported number represents a change of +5.3% year over year.Revenue- Michael Kors: $656 million versus $665.82 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -5.5% change.Income from operations- Michael Kors: $57 million versus $27.09 million estimated by three analysts on average.Income from operations- Jimmy Choo: $-20 million compared to the $-8.52 million average estimate based on three analysts.View all Key Company Metrics for Capri Holdings here>>>
Shares of Capri Holdings have returned -6.8% over the past month versus the Zacks S&P 500 composite's +5.1% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
Tapestry Stock Drops After Strong Quarter and Raised OutlookCapri NYSE: CPRI reported a return to profitability in its fiscal fourth quarter as management said strategic efforts at Michael Kors and Jimmy Choo are beginning to gain traction, while the company forecast revenue growth and sharply higher earnings in fiscal 2027.
On the company’s earnings call, Chairman and Chief Executive Officer John Idol said Capri made “deliberate actions” during fiscal 2026 to strengthen product innovation, brand desirability, storytelling and consumer engagement across its two remaining luxury fashion houses. The company has classified Versace as discontinued operations following its sale, and management said the transaction strengthened Capri’s balance sheet and financial flexibility.
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After a Huge Rally, Is There Any Upside Left for Ralph Lauren Stock? Fourth-quarter revenue from continuing operations was $796 million, down 3.7% from a year earlier on a reported basis and down 7% in constant currency, according to Raj Mehta, Capri’s former interim chief financial officer. Gross margin expanded 490 basis points to 64.8%, including a $40 million benefit recorded as a reduction to cost of goods sold related to a refund receivable for IEEPA tariffs paid in fiscal 2026.
Capri posted net income of $27 million, or $0.22 per diluted share, compared with a loss in the prior-year period. The company also repurchased $79 million of shares during the quarter, which Idol said was earlier than initially anticipated because of management’s confidence in Capri’s future growth and value creation.
Michael Kors Shows Progress, But Quality-of-Sale Actions Weigh on Sales As the Magnificent 7 Stalls, These 3 Stocks Are Gaining MomentumMichael Kors revenue fell 5.5% year over year on a reported basis and 8.4% in constant currency. Idol said the decline was primarily driven by initiatives to improve the “quality of sale,” including reduced promotional activity, lower third-party sales and fewer off-price shipments. He said those steps reduced fiscal 2026 revenue by more than $150 million, with the headwind expected to moderate as fiscal 2027 progresses.
Despite the revenue decline, management pointed to signs of improving brand health. In the retail channel, Michael Kors sales declined mid-single digits, but full-price comparable store sales turned positive in the fourth quarter across all regions. Average unit retail rose by low double digits, supported by higher full-price sell-throughs and reduced promotions. Idol also said store traffic trends improved sequentially.
By region, Michael Kors revenue increased 11% in EMEA and 10% in Asia, while revenue in the Americas declined 14%, largely reflecting the company’s quality-of-sale initiatives. Wholesale revenue declined mid-single digits, mainly because of lower off-price sales, though Idol said point-of-sale trends improved to approximately flat versus the prior year.
Management highlighted consumer response to the company’s “modern Jet Set” positioning, including its Hotel Stories campaign and product introductions across accessories. Idol said the Michael Kors global consumer database grew 8% year over year, aided by brand campaigns, runway visibility and influencer activity.
Jimmy Choo Returns to Growth in the Quarter Jimmy Choo revenue increased 5.3% year over year on a reported basis and was flat in constant currency. Retail sales rose mid-single digits, and wholesale revenue increased at a similar rate. Revenue rose 11% in the Americas and 8% in EMEA, while Asia declined 6%, with management noting sequential improvement from the prior quarter.
Idol said Jimmy Choo’s strategic actions are producing “tangible results,” including a return to growth in the back half of fiscal 2026. He said the brand is positioned to return to profitability in fiscal 2027.
The company highlighted product momentum in accessories and casual footwear. Idol cited strength in the Bon Bon and Cinch handbag groups, as well as encouraging consumer response to the Bar and Curve groups, which are part of a broader pricing architecture that includes bags below $1,500. In footwear, he said the Faiz lace pump performed well, while casual styles such as the Elisa ballerina flat and Sunny sneaker gained traction.
Jimmy Choo’s global customer database grew 7% year over year. Management credited campaigns including La Fleurs and the Rules of Engagement bridal campaign starring Gabourey Sidibe with helping drive engagement and attract younger customers.
Fiscal 2027 Outlook Calls for Revenue Growth and Margin Expansion For fiscal 2027, Capri expects revenue to rise at a low single-digit rate to approximately $3.525 billion. The company expects Michael Kors revenue of about $2.9 billion and Jimmy Choo revenue of about $625 million.
Management forecast gross margin expansion of approximately 200 basis points, with guidance assuming an additional 10% tariff on products entering the United States. Operating expense dollars are expected to increase modestly, while operating income is projected to rise about 60% to approximately $190 million.
Capri expects diluted earnings per share of approximately $2.15 in fiscal 2027, up about 40% from the prior year, assuming $200 million of share repurchases and weighted average shares outstanding of roughly 112 million.
Mehta said first-half revenue is expected to decline in the low single-digit range, with retail roughly flat and wholesale down low double digits. He said first-half earnings per share are expected to be about $0.85. In the second half, revenue is expected to increase at a mid-single-digit rate as strategic initiatives gain more traction, including a return to growth in the Michael Kors outlet channel. Fiscal 2027 includes a 53rd week, which is expected to add about one point to annual revenue growth.
For the first quarter, Capri guided for revenue of approximately $750 million, including about $585 million from Michael Kors and $165 million from Jimmy Choo. The company expects first-quarter diluted EPS of approximately $0.40.
Balance Sheet Strengthens After Versace Sale Mehta said Capri ended the quarter with cash of $135 million and debt of $357 million, resulting in net debt of $222 million, compared with approximately $1.4 billion a year earlier. Inventory at quarter-end was $581 million, down 17% year over year.
Capital expenditures were $63 million for fiscal 2026, primarily for store renovations and IT and digital investments. For fiscal 2027, Capri expects capital expenditures of approximately $125 million, including store renovations, new store openings and continued IT and digital enhancements.
The company has $921 million remaining under its share repurchase authorization. Mehta said Capri’s first capital allocation priority is investing in the business, followed by returning capital to shareholders through buybacks while maintaining a flexible balance sheet.
Management Emphasizes Longer-Term Brand Targets During the question-and-answer session, Idol said Capri is optimistic about the outlook for both brands. For Michael Kors, he said management expects growth to be led by full-price retail, followed by wholesale and then outlet. He said the company remains confident in its long-term ability to reach $4 billion in revenue and low-20% operating margins for Michael Kors.
For Jimmy Choo, Idol said Capri sees long-term revenue potential of $800 million and low double-digit operating margins. Chief Financial and Operating Officer Tyler Reddien said the company is in the early stages of a profit improvement program for Jimmy Choo, with areas of focus including store productivity, closing underperforming stores, SKU rationalization, inventory management, factory efficiencies and SG&A discipline.
Idol closed the call by saying Capri expects fiscal 2027 to mark a return to low single-digit revenue growth, with operating income and earnings per share increasing meaningfully as the company builds on its fiscal 2026 restructuring and brand repositioning efforts.
About Capri NYSE: CPRICapri Holdings Limited NYSE: CPRI is a global luxury fashion company that designs, markets and distributes a range of premium lifestyle products. The company's principal brands—Michael Kors, Versace and Jimmy Choo—offer handbags, ready-to-wear apparel, footwear, watches, jewelry, fragrance and other accessories. Capri Holdings combines in-house design talent with international sourcing, manufacturing and retail operations to deliver collections that reflect each brand's distinct heritage and aesthetic vision.
Formed in 2018 through the rebranding of Michael Kors Holdings following the acquisition of Versace, Capri has since integrated Jimmy Choo into its portfolio.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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The major indexes are pulling back from earlier gains to trade mixed at midday. Investors are focused on reports that Iran will reopen the Strait of Hormuz, pressuring crude prices back below $90 and sending the Dow Jones Industrial Average (DJI) to a fresh record high. The S&P 500 Index (SPX) and Nasdaq Composite (IXIC) are cooling off from the Micron-induced tech surge, with Zscaler (ZS) trailing, adding pressure and dragging the broader cloud sector down with it.
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Beverage behemoth PepsiCo Inc (NASDAQ:PEP) was last seen up 2% to trade at $148.65, continuing its whipsaw price action on the charts. While the catalyst remains unclear, call traders are circling, with 45,000 contracts traded already today. This amount is six times the average daily pace, with the September 170 call being most popular and seeing selling activity. PEP is currently clinging to a 3.5% year-to-date gain.
One of the top performers on the New York Stock Exchange (NYSE) is Manchester United PLC (NYSE:MANU), up 12.5% at $22.19 at last glance, after the English soccer club posted a fiscal third-quarter revenue rise of 18% and hiked its full-year revenue outlook. This is overshadowing a Q3 net loss of roughly $16 million. MANU has been climbing the charts this year, closing out the 25/26 Premier League season with a 57% year-over-year gain. The shares also tapped a nearly three-year high of $22.56, with the 100-day moving average capturing its April pullback.
Retailer Capri Holdings Ltd (NYSE:CPRI) is near the bottom of the NYSE, last seen down 5.4% to trade at $17.50, brushing off a fiscal fourth-quarter profit beat after quarterly sales disappointed once again. The Michael Kors parent has shed 28% in 2026 and is continuing back toward its late-March lows.
Key Takeaways Capri posted Q4 adjusted EPS of 22 cents, beating estimates and improving year over year.CPRI sees FY27 low-single-digit revenue growth and nearly 40% EPS growth ahead.Jimmy Choo revenues rose 5.3% in Q4, while Michael Kors showed improving retail trends. Capri Holdings Limited (CPRI - Free Report) delivered fourth-quarter fiscal 2026 results, with revenues missing the Zacks Consensus Estimate and declining year over year. However, earnings surpassed the consensus estimate and improved significantly from the prior-year quarter.
Management highlighted that strategic initiatives introduced last year are gaining traction, with improving trends visible across both Michael Kors and Jimmy Choo. The company noted that actions taken to strengthen product innovation, brand desirability and consumer engagement are resonating well with consumers, providing early validation of its transformation efforts. Capri Holdings also emphasized that fiscal 2026 was focused on stabilizing the business and building a stronger foundation for long-term growth.
Looking ahead, management expressed confidence in returning to revenue and earnings growth in fiscal 2027, projecting low-single-digit revenue growth and nearly 40% earnings-per-share growth. Longer term, the company aims to grow Michael Kors revenues to $4 billion and Jimmy Choo revenues to $800 million while significantly improving profitability and delivering sustainable long-term shareholder value.
More on Capri Holdings’ Q4 ResultsCapri Holdings reported adjusted earnings of 22 cents per share for the fourth quarter, which surpassed the Zacks Consensus Estimate of 11 cents. The bottom line improved significantly from an adjusted loss of $4.55 per share reported in the year-ago period. On a reported basis, the company posted a loss of one cent per share compared with a loss of $4.90 in the prior-year quarter.
Total revenues came in at $796 million, missing the Zacks Consensus Estimate of $804 million. The top line declined 3.7% year over year on a reported basis and 7% on a constant-currency basis.
By geography, The Americas remained the largest region but was also the main drag, with revenues of $433 million compared with $493 million in the year-ago quarter. EMEA improved to $246 million from $223 million, while Asia edged up to $117 million from $111 million, partially offsetting softness in the Americas.
Gross profit increased to $516 million from $495 million in the year-ago quarter. Gross margin expanded 490 basis points to 64.8%, aided by a $40 million reduction in the cost of goods sold tied to estimated IEEPA tariff refunds.
Operating loss narrowed to $27 million from $57 million a year ago. On an adjusted basis, operating loss improved to $1 million from $15 million in the prior-year quarter, with adjusted operating margin improving to negative 0.1% from negative 1.8% a year ago.
CPRI’s Q4 Revenue Insights by SegmentsMichael Kors generated revenues of $656 million, down 5.5% year over year on a reported basis and 8.4% on a constant-currency basis. This missed the Zacks Consensus Estimate of $666 million. The brand experienced sequential improvement in retail trends, with full-price retail channel comparable sales increasing across all regions. Total retail channel average unit retails (AURs) increased by a mid-single-digit percentage, while wholesale sales at the point of sale improved to approximately flat compared with the prior year.
Gross margin expanded to 64.6%, benefiting from an estimated receivable related to IEEPA tariff refunds. Operating income increased to $57 million from $32 million a year ago, while operating margin expanded to 8.7% from 4.6% in the prior-year quarter.
Jimmy Choo delivered a solid performance, with revenues increasing 5.3% year over year to $140 million on a reported basis and remaining flat on a constant-currency basis. This surpassed the Zacks Consensus Estimate of $138 million. Retail sales increased by a mid-single-digit percentage, with sequential improvement across all regions, while wholesale point-of-sale trends also improved sequentially. Gross margin came in at 65.7%. However, the brand reported an operating loss of $20 million compared with an operating loss of $10 million in the prior-year quarter.
Capri Holdings’ Financial Health SnapshotCapri Holdings exited fiscal 2026 with cash and cash equivalents of $135 million and total borrowings of $357 million, resulting in net debt of $222 million, a significant improvement from $1.4 billion in the prior year. Operating cash flow for fiscal 2026 totaled $197 million, while capital expenditures were $63 million, leading to free cash flow of $134 million. Inventory levels declined 17% year over year to $581 million, reflecting improved inventory discipline and operational efficiency.
Capri Holdings resumed a more aggressive capital return stance in the quarter, repurchasing approximately 4 million shares for $79 million. The remaining authorization under the share repurchase program was $921 million at the end of the fourth quarter.
Capri Holdings’ Q1 OutlookFor the first quarter of fiscal 2027, Capri Holdings expects total revenues of approximately $750 million and operating income of around $10 million. Net interest and other income are projected at roughly $20 million, while the effective tax rate is expected to be approximately negative 50%. The company anticipates earnings per share of about 40 cents.
Within the segments, Michael Kors revenues are projected at approximately $585 million, with the operating margin expected in the high-single-digit range. Jimmy Choo revenues are anticipated to be approximately $165 million, with the operating margin in the low-single-digit range.
CPRI’s FY27 GuidanceFor fiscal 2027, Capri Holdings expects total revenues of approximately $3.525 billion, representing growth of nearly 1.5% from fiscal 2026 revenues of $3.474 billion. The company projects operating income of around $190 million compared with $23 million reported in fiscal 2026. Net interest and other income are projected in the range of $85-$90 million, while the effective tax rate is expected to be in the low-teens range. The company anticipates earnings per share of about $2.15. Capri Holdings also plans share repurchases of nearly $200 million and capital expenditures of approximately $125 million during the fiscal year.
For Michael Kors, fiscal 2027 revenues are expected to be approximately $2.9 billion, with the operating margin projected in the low-double-digit range. Jimmy Choo revenues are anticipated to be approximately $625 million, with the operating margin in the low-single-digit range.
CPRI Stock Past Three-Month Performance
Image Source: Zacks Investment Research
Shares of this Zacks Rank #3 (Hold) company have fallen 4.9% over the past three months compared with the industry’s decline of 10.6%.
Key PicksSome better-ranked stocks in the retail space are Tapestry, Inc. (TPR - Free Report) , Victoria's Secret & Co. and Levi Strauss & Co. (LEVI - Free Report) .
Tapestry is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. It carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales indicates growth of 36.3% and a decline of 13.2%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 15.6%.
Victoria's Secret is a specialty retailer of women's intimates, sleepwear, apparel, sport and swimwear, and prestige fragrances and body care. It currently has a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 55.1%, on average.
The Zacks Consensus Estimate for VSCO’s current fiscal-year sales and earnings indicates growth of 6.2% and 16.3%, respectively, from the year-ago reported numbers.
Levi Strauss designs and markets jeans, casual wear and related accessories for men, women and children. It currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Levi Strauss’ current fiscal-year earnings and sales suggests growth of 11.9% and 5.2%, respectively, from the year-ago actuals. LEVI delivered a trailing four-quarter average earnings surprise of 21.4%.
Capri Holdings (NYSE:CPRI) reported fiscal fourth quarter results that showed stronger-than-expected profitability but weaker-than-expected revenue, sending shares down more than 6% on Wednesday afternoon.
The company posted adjusted earnings per share of $0.22, more than double the $0.11 consensus estimate.
Revenue totaled $796 million, below Wall Street expectations of $803.7 million and down 3.7% year-over-year, or down 7% on a constant currency basis.
For fiscal 2027, Capri Holdings expects total revenue of approximately $3.53 billion and operating income of about $190 million.
Capital expenditures are projected to be around $125 million, while diluted earnings per share are expected to come in at approximately $2.15.
“We are building upon the improving trends resulting from the success of our strategic initiatives,” Capri CEO John Idol said. “In fiscal 2027 we expect to return to low single digit revenue growth and approximately 40% earnings per share growth.”
Jefferies analysts described the quarter as mixed, noting that revenue came in slightly below expectations, driven primarily by Michael Kors, while EBIT and EPS beat consensus.
They noted that profit outperformance was supported in part by approximately $40 million in IEEPA tariff refunds, and cautioned that excluding this benefit, underlying EBIT appeared softer, though timing and offsetting factors may have played a role.
Looking ahead, Jefferies highlighted financial year 2027 guidance that came in broadly in line on revenue but above expectations on EBIT and EPS, supported by an anticipated 200 basis point improvement in gross margin.
The firm noted that the outlook also included moving items below the EBIT line, including interest income, tax rate assumptions, and share count benefits from buybacks.
At the same time, Jefferies pointed to a softer-than-expected first-quarter outlook, with both revenue and EBIT guided below Street expectations, even as EPS came in higher due to tax rate dynamics.
On brand performance, the analysts highlighted continued strength in Michael Kors retail full-price comparable sales and sequential improvement in wholesale trends, alongside similar momentum at Jimmy Choo. They also noted that the company repurchased approximately 4 million shares for $79 million during the quarter.
Capri Holdings (NYSE:CPRI) reported fiscal fourth quarter results that showed stronger-than-expected profitability but weaker-than-expected revenue, sending shares down more than 6% on Wednesday afternoon.
The company posted adjusted earnings per share of $0.22, more than double the $0.11 consensus estimate.
Revenue totaled $796 million, below Wall Street expectations of $803.7 million and down 3.7% year-over-year, or down 7% on a constant currency basis.
For fiscal 2027, Capri Holdings expects total revenue of approximately $3.53 billion and operating income of about $190 million.
Capital expenditures are projected to be around $125 million, while diluted earnings per share are expected to come in at approximately $2.15.
“We are building upon the improving trends resulting from the success of our strategic initiatives,” Capri CEO John Idol said. “In fiscal 2027 we expect to return to low single digit revenue growth and approximately 40% earnings per share growth.”
Jefferies analysts described the quarter as mixed, noting that revenue came in slightly below expectations, driven primarily by Michael Kors, while EBIT and EPS beat consensus.
They noted that profit outperformance was supported in part by approximately $40 million in IEEPA tariff refunds, and cautioned that excluding this benefit, underlying EBIT appeared softer, though timing and offsetting factors may have played a role.
Looking ahead, Jefferies highlighted financial year 2027 guidance that came in broadly in line on revenue but above expectations on EBIT and EPS, supported by an anticipated 200 basis point improvement in gross margin.
The firm noted that the outlook also included moving items below the EBIT line, including interest income, tax rate assumptions, and share count benefits from buybacks.
At the same time, Jefferies pointed to a softer-than-expected first-quarter outlook, with both revenue and EBIT guided below Street expectations, even as EPS came in higher due to tax rate dynamics.
On brand performance, the analysts highlighted continued strength in Michael Kors retail full-price comparable sales and sequential improvement in wholesale trends, alongside similar momentum at Jimmy Choo. They also noted that the company repurchased approximately 4 million shares for $79 million during the quarter.
Have you looked into how Capri Holdings (CPRI - Free Report) performed internationally during the quarter ending March 2026? Considering the widespread global presence of this luxury retailer, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.
The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.
Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.
While delving into CPRI's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.
For the quarter, the company's total revenue amounted to $796 million, experiencing a decline of 23.1% year over year. Next, we'll explore the breakdown of CPRI's international revenue to understand the importance of its overseas business operations.
Unveiling Trends in CPRI's International RevenuesAsia generated $117 million in revenues for the company in the last quarter, constituting 14.7% of the total. This represented a surprise of +7.29% compared to the $109.06 million projected by Wall Street analysts. Comparatively, in the previous quarter, Asia accounted for $111 million (10.8%), and in the year-ago quarter, it contributed $172 million (16.6%) to the total revenue.
EMEA accounted for 30.9% of the company's total revenue during the quarter, translating to $246 million. Revenues from this region represented a surprise of +3.67%, with Wall Street analysts collectively expecting $237.29 million. When compared to the preceding quarter and the same quarter in the previous year, EMEA contributed $268 million (26.2%) and $302 million (29.2%) to the total revenue, respectively.
Anticipated Revenues in Overseas MarketsIt is projected by analysts on Wall Street that Capri Holdings will post revenues of $751.5 million for the ongoing fiscal quarter, a decline of 5.7% from the year-ago quarter. The expected contributions from Asia and EMEA to this revenue are 14.4%, and 31.5%, translating into $108.27 million, and $236.75 million, respectively.
For the full year, the company is expected to generate $3.53 billion in total revenue, up 1.6% from the previous year. Revenues from Asia and EMEA are expected to constitute 12.3% ($435.21 million), and 29.3% ($1.03 billion) of the total, respectively.
Key TakeawaysRelying on global markets for revenues presents both prospects and challenges for Capri Holdings. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.
In an era of growing international ties and escalating geopolitical disputes, financial analysts on Wall Street pay keen attention to these developments to fine-tune their earnings estimations for businesses operating across borders. It's important to note, however, that a range of additional variables, like a company's local market status, also play a crucial role in shaping these forecasts.
We at Zacks strongly focus on the dynamic earnings forecast of companies, given that empirical studies have demonstrated its potent impact on the immediate price movement of stocks. Invariably, there's a positive relationship -- upward earnings predictions often result in an increase in stock prices.
Our proprietary stock rating tool, the Zacks Rank, with its externally validated exceptional track record, harnesses the power of earnings estimate revisions to serve as a dependable measure for anticipating the short-term price trends of stocks.
Capri Holdings, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
A Review of Capri Holdings' Recent Stock Market PerformanceOver the past month, the stock has lost 5.7% versus the Zacks S&P 500 composite's 6.3% increase. The Zacks Retail-Wholesale sector, of which Capri Holdings is a part, has declined 1.8% over the same period. The company's shares have increased 3.1% over the past three months compared to the S&P 500's 10.5% increase. Over the same period, the sector has risen 3.6%
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Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Capri Holdings (CPRI - Free Report) Capri Holdings Limited operates in the global personal luxury goods industry.
CPRI is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 9.39; value investors should take notice.
Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2027. The Zacks Consensus Estimate has increased $0.15 to $1.96 per share. CPRI boasts an average earnings surprise of +66.8%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, CPRI should be on investors' short list.
RetailMeNot's Summer Issue savings event runs June 4-8, featuring stackable deals, shopping inspiration and seasonal savings across top retailers New summer research reveals Y2K-inspired fashion resurgence and growing demand for polished, versatile alternatives like capris , /PRNewswire/ -- RetailMeNot today announced its first-ever Chief Capri Officer (CCO) search, a summer initiative offering one consumer the opportunity to bring one of the season's biggest fashion comebacks to life. The opportunity is part of RetailMeNot's Summer Issue savings event and is informed by new consumer data showing that shoppers are increasingly rethinking traditional summer staples in favor of more polished, versatile styles.
RetailMeNot's Summer Issue is a new summer savings event running June 4-8 designed to help consumers save on everything they need for the season. Curated to feel like a go-to summer magazine for inspiration and savings, the event brings together promo codes, cash back offers and exclusive deals from top retailers to help shoppers save on everyday summer essentials. Participating retailers span key categories including fashion, beauty, travel and more, with brands such as Ulta, Ray-Ban, Expedia, Kendra Scott and Macy's.
New summer consumer data from RetailMeNot suggests capris are emerging as one of the season's standout fashion trends, with 28% of women planning to purchase a pair this summer and many embracing the style as a more polished, versatile alternative to shorts. To bring this trend to life, RetailMeNot is launching its first-ever Chief Capri Officer search, giving one consumer the opportunity to showcase one of summer's biggest fashion comebacks.
"The Chief Capri Officer search brings one of summer's top trends to life in a way that's fun, relatable, and rooted in real shopping behavior," said Stephanie Carls, Retail Insights Expert at RetailMeNot. "Half of millennial women prefer capris over shorts across occasions. That's a movement, and the Summer Issue is the perfect place to shop it."
Survey Data Signals a Shift in Summer Style
Findings from RetailMeNot's summer consumer survey* reveal a clear shift in how women are approaching warm-weather dressing:
50% of Millennial women say capris are more appropriate than shorts for brunch or casual dining. Only 11% of women believe shorts work across all summer occasions. 28% of women plan to purchase capris this summer, making them one of the top Y2K-inspired fashion trends. Together, the data suggests that shoppers are embracing styles that feel both practical and elevated, easily transitioning from casual outings to more social settings.
RetailMeNot's Chief Capri Officer Program
RetailMeNot will select one Chief Capri Officer to showcase how capris fit into real-life summer wardrobes. The chosen candidate will receive a $5,000 shopping stipend to style and shop the trend. The program reflects how consumers discover trends today, blending inspiration, practicality, and savings to turn aspirational ideas into everyday style.
To learn more or apply to be RetailMeNot's Chief Capri Officer, visit RetailMeNot.com/CCO
RetailMeNot's Summer Issue can be explored at RetailMeNot.com/Summer
How to Apply
Consumers can apply between June 4 and June 18, 2026. Applicants must be U.S. residents, age 21 or older. No purchase is necessary.
To enter:
Submit a short application at RetailMeNot.com/CCO Share why you're the ideal CCO and how you would style capris this summer. The selected winner will:
Receive a $5,000 shopping stipend. Create user-generated content featuring capri styling and have the opportunity to be featured across RetailMeNot's social channels. *Survey Methodology: Source: RetailMeNot Summer 2026 Spending Survey among adults from 18 to 44. N=896. Fielded in April 2026
About RetailMeNot Group: The RetailMeNot Group brings together leading shopping, savings, and deal discovery brands that help people shop smarter and help businesses connect with high-intent consumers at moments of purchase. The RetailMeNot Group portfolio includes RetailMeNot, Offers.com, BlackFriday.com, TechBargains, Deals of America and R BrandWorks, reaching millions of consumers through trusted social content, real-time deals, cash back, and seasonal shopping moments. RetailMeNot Group operates as part of Ziff Davis, a leading digital media and internet company. To learn more, visit www.ziffdavis.com/brands/shopping
About Ziff Davis: Ziff Davis (Nasdaq: ZD) is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, entertainment, shopping, health, cybersecurity, and martech. For more information, visit www.ziffdavis.com.
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Capri Holdings (CPRI - Free Report) Capri Holdings Limited operates in the global personal luxury goods industry through two fashion luxury houses: Michael Kors and Jimmy Choo. The company designs, markets and distributes luxury accessories, footwear and apparel through retail stores, e-commerce sites, and wholesale partners, supported by product and geographic licensing agreements. The company sells across three principal geographic markets: the Americas, EMEA and Asia. E-commerce represented approximately 21% of net revenues in fiscal 2026.
CPRI is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Retail-Wholesale stock. CPRI has a Momentum Style Score of A, and shares are up 0.8% over the past four weeks.
Four analysts revised their earnings estimate upwards in the last 60 days for fiscal 2027. The Zacks Consensus Estimate has increased $0.20 to $2.01 per share. CPRI boasts an average earnings surprise of +66.8%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, CPRI should be on investors' short list.
MILL VALLEY, Calif.--(BUSINESS WIRE)--Redwood Trust, Inc. (NYSE: RWT; “Redwood” or the “Company”), a leader in expanding access to housing for homebuyers and renters, today announced the closing of SEMT 2026-MED1, the inaugural Medical Professionals loan securitization issued through Sequoia, Redwood's jumbo mortgage platform. The $482 million transaction marks Sequoia's 165th securitization and represents an important milestone for the platform as a first-of-its-kind securitization backed by m.
Investors may be pursuing opportunities to add income from dividend-paying stocks in the current market environment of uncertainty and volatility surrounding tensions in the Middle East that have led to high energy prices.
Required to pay out at least 90% of their taxable income as dividends to avoid corporate income tax, REITs are typically a great way to add income in a portfolio while getting exposure to valuable real estate assets in the process.
Optimistically, several affordable REITs with high dividend yields have made their way onto the coveted Zacks Rank #1 (Strong Buy) list.
These REITs looked poised for more upside based on a trend of positive EPS revisions, but a further pullback in the broader market may present even more lucrative opportunities to add meaningful income-producing positions.
Blackstone Mortgage – BXMTStock Price: $19
Dividend Yield: 9.74%
Trading just under $20 a share, Blackstone Mortgage Trust (BXMT - Free Report) ) is the most expensive stock on the list and is hovering near a 52-week high with a one-year low of $16 a share. Blackstone is a REIT focused on loans and securities backed by commercial real estate assets, with favorable EPS projections of $1.76 in FY26 (58% increase) and $1.99 per share in FY27.
Blackstone’s tight nit 52-week range makes it appealing to build positions, considering its nearly 10% annual dividend yield and BXMT trades at a reasonable 10X forward earnings multiple.
BXMT has been a long-standing income payer, maintaining quarterly dividends through multiple rate cycles and real-estate market conditions for roughly 12 years.
Chicago Atlantic – REFIStock Price: $11
Dividend Yield: 16.49%
Trading at the low end of its 52-week range, Chicago Atlantic Real Estate Finance (REFI - Free Report) ) offers the highest yield on the list at over 16%. Going public in 2021, Chicago Atlantic offers exposure to first mortgage loans to state-licensed operators in the cannabis industry, secured by real estate, equipment, receivables, licenses, or other assets of the borrowers.
Having a 52-week peak of $16 a share, the risk-to-reward looks priced in with REFI having a low beta reading of 0.23. Securities with betas below 1 have historically been less volatile than the broader market, making this very lofty dividend more enticing to go after.
Furthermore, REFI trades at just 5X forward earnings, with annual EPS projected to be above $1.90 for the foreseeable future.
Chatham Lodging – CLDTStock Price: $8
Dividend Yield: 4.82%
Operating as a hotel REIT, Chatham Lodging Trust (CLDT - Free Report) ) invests in premium-branded upscale extended-stay and select-service hotels, including brands such as Residence Inn by Marriott, Homewood Suites by Hilton, and Summerfield Suites by Hyatt.
At under $10 a share, CLDT has an attractive dividend that’s nearly 5% and trades at a cheap 6X forward earnings multiple with EPS expected to spike 17% this year and projected to increase another 10% in FY27 to $1.32.
Reassuringly, CLDT has a very low volatile 52-week range of $6.08-$8.60. It’s also noteworthy that outside of the hotel-wide industry disruptions during the pandemic (2020-2022 dividend suspension), the company has consistently paid a dividend since going public in 2010. Plus, Chatham Lodging pays its dividends monthly as opposed to quarterly, being the only REIT on the list to do so.
Redwood Trust – RWTStock Price: $5
Dividend Yield: 12.29%
We’ll end with Redwood Trust (RWT - Free Report) ), the cheapest REIT stock on the list at $5 a share and trading at just 4X forward earnings. Redwood specializes in acquiring and managing real estate mortgage assets, which may be acquired as whole loans or as mortgage securities representing interests in or obligations backed by pools of mortgage loans.
RWT has a tight 52-week range of $4.85-$6.97, making its 12% annual dividend yield very appealing. Even better, EPS is expected to leap 45% to $1.28 in FY26 compared to $0.88 per share last year. Fiscal 2027 EPS is projected to contract to $0.98, but estimates are up from $0.92 per share two months ago.
While Redwood Trust doesn’t classify as a Dividend Aristocrat as it hasn’t consistently increased its dividend for at least 25 consecutive years, it has still reliably paid a dividend for 31 years, since going public in 1995 and being the longest standing REIT on the list.
MILL VALLEY, Calif.--(BUSINESS WIRE)--Redwood Trust, Inc. (NYSE: RWT; “Redwood” or the “Company”), a leader in expanding access to housing for homebuyers and renters, is scheduled to release its first quarter 2026 results on Wednesday, April 29, 2026 after the close of the New York Stock Exchange. In addition, Redwood's senior management team plans to hold a conference call to discuss its first quarter 2026 financial results that same afternoon at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time.
Webcast Information
The conference call will be webcast live in listen-only mode through the News & Events section of Redwood Trust’s Investor Relations website at https://www.redwoodtrust.com/investor-relations/news-events/events. To listen to the webcast, please go to Redwood's website at least 15 minutes before the call to register and to download and install any needed audio software. An audio replay of the call will also be available on Redwood's website following the call.
Conference Call Information
To participate by phone, please dial-in at least 15 minutes prior to the start time to allow for wait times to access the conference call. The live conference call will be accessible domestically or internationally, by dialing 1-877-423-9813 or 1-201-689-8573, respectively. In addition to the aforementioned dial-in information, participants can also access the call, bypassing the live operator and receiving an instant callback, by accessing the callback link on the Investor Relations section of the Company’s website or using the following link (this feature is available 15 minutes prior to the scheduled event): https://callme.viavid.com/viavid/?callme=true&passcode=13721503&h=true&info=company&r=true&B=6.
A replay of the conference call will be available after 9:00 p.m. Eastern Time / 6:00 p.m. Pacific Time on Wednesday, April 29, 2026, through 11:59 p.m. Eastern Time / 8:59 p.m. Pacific Time on Wednesday, May 13, 2026. To access the replay, listeners may use 1-844-512-2921 (domestic) or 1-412-317-6671 (international). The passcode for the replay is 13759155.
ABOUT REDWOOD TRUST
Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company focused on several distinct areas of housing credit where we provide liquidity to growing segments of the U.S. housing market not well served by government programs. We deliver customized housing credit investments to a diverse mix of investors, through our best-in-class securitization platforms, whole-loan distribution activities, joint ventures and our publicly traded shares. We operate through three core residential housing-focused platforms — Sequoia, Aspire, and CoreVest — alongside a complementary investment portfolio primarily composed of assets we source through these businesses. In addition, through RWT Horizons®, our venture investing initiative, we invest in early-stage companies that have a direct nexus to our operating platforms. Our goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, capital appreciation, and a commitment to technological innovation that facilitates risk-minded scale. Redwood Trust is internally managed and structured as a real estate investment trust ("REIT") for tax purposes. For more information about Redwood, please visit our website at www.redwoodtrust.com or connect with us on LinkedIn.
Evergreen Capital Management LLC raised its position in shares of Redwood Trust, Inc. (NYSE:RWT – Free Report) by 52.8% in the fourth quarter, according to its most recent 13F filing with the Securities & Exchange Commission. The firm owned 1,674,009 shares of the real estate investment trust’s stock after purchasing an additional 578,301 shares during the period. Evergreen Capital Management LLC owned 1.32% of Redwood Trust worth $9,257,000 at the end of the most recent quarter.
A number of other hedge funds and other institutional investors have also recently bought and sold shares of RWT. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its stake in Redwood Trust by 26.7% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 492,661 shares of the real estate investment trust’s stock valued at $2,990,000 after purchasing an additional 103,893 shares during the period. Jane Street Group LLC acquired a new position in Redwood Trust during the 1st quarter valued at about $2,018,000. Strs Ohio acquired a new position in Redwood Trust during the 1st quarter valued at about $149,000. XTX Topco Ltd boosted its stake in Redwood Trust by 35.4% during the 2nd quarter. XTX Topco Ltd now owns 14,513 shares of the real estate investment trust’s stock valued at $86,000 after purchasing an additional 3,795 shares during the period. Finally, Russell Investments Group Ltd. boosted its stake in Redwood Trust by 331.8% during the 2nd quarter. Russell Investments Group Ltd. now owns 7,915 shares of the real estate investment trust’s stock valued at $47,000 after purchasing an additional 6,082 shares during the period. 74.34% of the stock is owned by institutional investors and hedge funds.
Analyst Ratings Changes A number of research analysts have issued reports on the stock. Wall Street Zen lowered shares of Redwood Trust from a “hold” rating to a “sell” rating in a research note on Monday, April 6th. Weiss Ratings reissued a “sell (d)” rating on shares of Redwood Trust in a research note on Thursday, January 22nd. Piper Sandler reduced their target price on shares of Redwood Trust from $6.50 to $6.00 and set a “neutral” rating for the company in a research note on Thursday, April 2nd. JonesTrading reaffirmed a “buy” rating and issued a $6.25 price target on shares of Redwood Trust in a research note on Tuesday, March 3rd. Finally, Keefe, Bruyette & Woods upped their price target on shares of Redwood Trust from $5.75 to $7.00 and gave the stock a “market perform” rating in a research note on Wednesday, February 18th. Five research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, Redwood Trust presently has an average rating of “Hold” and an average price target of $6.82.
Read Our Latest Report on Redwood Trust
Redwood Trust Stock Down 1.1% RWT stock opened at $5.94 on Tuesday. Redwood Trust, Inc. has a 12 month low of $5.00 and a 12 month high of $6.97. The firm has a market cap of $741.88 million, a PE ratio of -9.73 and a beta of 1.52. The firm has a 50 day simple moving average of $5.90 and a 200 day simple moving average of $5.67. The company has a debt-to-equity ratio of 24.34, a current ratio of 55.15 and a quick ratio of 55.15.
Redwood Trust (NYSE:RWT – Get Free Report) last released its earnings results on Wednesday, February 11th. The real estate investment trust reported $0.20 EPS for the quarter, missing the consensus estimate of $0.22 by ($0.02). Redwood Trust had a negative net margin of 5.93% and a positive return on equity of 12.00%. The business had revenue of $140.33 million for the quarter, compared to analyst estimates of $24.88 million. Equities research analysts forecast that Redwood Trust, Inc. will post 1.28 earnings per share for the current fiscal year.
Redwood Trust Announces Dividend The firm also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Investors of record on Tuesday, March 24th were paid a dividend of $0.18 per share. The ex-dividend date of this dividend was Tuesday, March 24th. This represents a $0.72 annualized dividend and a yield of 12.1%. Redwood Trust’s dividend payout ratio is currently -118.03%.
About Redwood Trust (Free Report)
Redwood Trust, Inc (NYSE:RWT) is a publicly traded real estate investment trust specializing in the U.S. residential mortgage market. Headquartered in Mill Valley, California, the company focuses on investing in a diversified portfolio of residential mortgage assets, including whole loans, agency and non-agency mortgage-backed securities, and structured credit products.
The company’s core activities encompass the acquisition, financing, and management of prime residential mortgage whole loans and mortgage-backed securities.
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The market expects Redwood Trust (RWT - Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on April 29. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus EstimateThis specialty finance company is expected to post quarterly earnings of $0.28 per share in its upcoming report, which represents a year-over-year change of +100%.
Revenues are expected to be $31.58 million, up 13.2% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 8.96% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Redwood Trust?For Redwood Trust, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +20.00%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that Redwood Trust will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Redwood Trust would post earnings of $0.23 per share when it actually produced earnings of $0.33, delivering a surprise of +43.48%.
Over the last four quarters, the company has beaten consensus EPS estimates two times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Redwood Trust appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Shares of Redwood Trust, Inc. (NYSE:RWT – Get Free Report) have been given a consensus rating of “Hold” by the ten analysts that are currently covering the stock, MarketBeat Ratings reports. One equities research analyst has rated the stock with a sell recommendation, four have issued a hold recommendation and five have issued a buy recommendation on the company. The average 12-month target price among brokers that have updated their coverage on the stock in the last year is $6.8214.
A number of research analysts have weighed in on RWT shares. Keefe, Bruyette & Woods raised their target price on shares of Redwood Trust from $5.75 to $7.00 and gave the stock a “market perform” rating in a research note on Wednesday, February 18th. JonesTrading reaffirmed a “buy” rating and set a $6.25 price target on shares of Redwood Trust in a research report on Tuesday, March 3rd. Wall Street Zen lowered shares of Redwood Trust from a “hold” rating to a “sell” rating in a research report on Monday, April 6th. Weiss Ratings reaffirmed a “sell (d)” rating on shares of Redwood Trust in a research report on Thursday, January 22nd. Finally, Zacks Research lowered shares of Redwood Trust from a “strong-buy” rating to a “hold” rating in a research report on Monday, April 13th.
Read Our Latest Stock Report on RWT
Redwood Trust Trading Up 0.1% RWT opened at $5.72 on Monday. The company has a debt-to-equity ratio of 24.34, a current ratio of 55.15 and a quick ratio of 55.15. The company’s 50 day simple moving average is $5.87 and its two-hundred day simple moving average is $5.67. Redwood Trust has a 1-year low of $5.00 and a 1-year high of $6.97. The firm has a market capitalization of $714.38 million, a price-to-earnings ratio of -9.37 and a beta of 1.52.
Redwood Trust (NYSE:RWT – Get Free Report) last released its earnings results on Wednesday, February 11th. The real estate investment trust reported $0.20 earnings per share for the quarter, missing analysts’ consensus estimates of $0.22 by ($0.02). Redwood Trust had a positive return on equity of 12.00% and a negative net margin of 5.93%.The business had revenue of $140.33 million during the quarter, compared to analysts’ expectations of $24.88 million. Analysts expect that Redwood Trust will post 1.2 EPS for the current fiscal year.
Redwood Trust Dividend Announcement The company also recently declared a quarterly dividend, which was paid on Tuesday, March 31st. Stockholders of record on Tuesday, March 24th were given a dividend of $0.18 per share. This represents a $0.72 annualized dividend and a dividend yield of 12.6%. The ex-dividend date of this dividend was Tuesday, March 24th. Redwood Trust’s payout ratio is presently -118.03%.
Institutional Trading of Redwood Trust Several institutional investors have recently made changes to their positions in RWT. UBS Group AG raised its position in shares of Redwood Trust by 521.1% during the 4th quarter. UBS Group AG now owns 3,875,226 shares of the real estate investment trust’s stock valued at $21,430,000 after buying an additional 3,251,302 shares during the period. Wellington Management Group LLP raised its position in shares of Redwood Trust by 10.2% during the 3rd quarter. Wellington Management Group LLP now owns 15,020,483 shares of the real estate investment trust’s stock valued at $86,969,000 after buying an additional 1,395,675 shares during the period. Evergreen Capital Management LLC raised its position in shares of Redwood Trust by 52.8% during the 4th quarter. Evergreen Capital Management LLC now owns 1,674,009 shares of the real estate investment trust’s stock valued at $9,257,000 after buying an additional 578,301 shares during the period. Tran Capital Management L.P. purchased a new stake in shares of Redwood Trust during the 4th quarter valued at approximately $2,947,000. Finally, Invesco Ltd. raised its position in shares of Redwood Trust by 25.4% during the 4th quarter. Invesco Ltd. now owns 2,551,067 shares of the real estate investment trust’s stock valued at $14,107,000 after buying an additional 516,630 shares during the period. Hedge funds and other institutional investors own 74.34% of the company’s stock.
About Redwood Trust (Get Free Report)
Redwood Trust, Inc (NYSE:RWT) is a publicly traded real estate investment trust specializing in the U.S. residential mortgage market. Headquartered in Mill Valley, California, the company focuses on investing in a diversified portfolio of residential mortgage assets, including whole loans, agency and non-agency mortgage-backed securities, and structured credit products.
The company’s core activities encompass the acquisition, financing, and management of prime residential mortgage whole loans and mortgage-backed securities.
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Redwood Trust (NYSE:RWT – Get Free Report) is expected to release its Q1 2026 results after the market closes on Wednesday, April 29th. Analysts expect Redwood Trust to post earnings of $0.2239 per share and revenue of $89.5440 million for the quarter. Interested persons can find conference call details on the company’s upcoming Q1 2026 earning report page for the latest details on the call scheduled for Wednesday, April 29, 2026 at 5:00 PM ET.
Redwood Trust (NYSE:RWT – Get Free Report) last released its earnings results on Wednesday, February 11th. The real estate investment trust reported $0.20 EPS for the quarter, missing analysts’ consensus estimates of $0.22 by ($0.02). The firm had revenue of $140.33 million during the quarter, compared to analysts’ expectations of $24.88 million. Redwood Trust had a negative net margin of 5.93% and a positive return on equity of 12.00%. On average, analysts expect Redwood Trust to post $1 EPS for the current fiscal year and $1 EPS for the next fiscal year.
Redwood Trust Trading Up 0.1% RWT opened at $5.72 on Monday. The stock has a market cap of $714.38 million, a PE ratio of -9.37 and a beta of 1.52. The company has a quick ratio of 55.15, a current ratio of 55.15 and a debt-to-equity ratio of 24.34. The business has a 50 day moving average of $5.87 and a 200-day moving average of $5.67. Redwood Trust has a 52 week low of $5.00 and a 52 week high of $6.97.
Redwood Trust Announces Dividend The company also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Stockholders of record on Tuesday, March 24th were paid a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a dividend yield of 12.6%. The ex-dividend date was Tuesday, March 24th. Redwood Trust’s dividend payout ratio (DPR) is presently -118.03%.
Institutional Investors Weigh In On Redwood Trust Institutional investors and hedge funds have recently made changes to their positions in the company. CIBC Bancorp USA Inc. bought a new stake in shares of Redwood Trust in the 3rd quarter worth $82,000. Mercer Global Advisors Inc. ADV bought a new stake in shares of Redwood Trust in the 3rd quarter worth $89,000. Brooklyn Investment Group increased its holdings in shares of Redwood Trust by 1,884.5% in the 3rd quarter. Brooklyn Investment Group now owns 15,400 shares of the real estate investment trust’s stock worth $89,000 after purchasing an additional 14,624 shares in the last quarter. Caption Management LLC bought a new stake in shares of Redwood Trust in the 3rd quarter worth $100,000. Finally, BNP Paribas Financial Markets increased its holdings in shares of Redwood Trust by 53.2% in the 2nd quarter. BNP Paribas Financial Markets now owns 13,506 shares of the real estate investment trust’s stock worth $80,000 after purchasing an additional 4,692 shares in the last quarter. Institutional investors own 74.34% of the company’s stock.
Analyst Upgrades and Downgrades A number of research firms have recently commented on RWT. Wall Street Zen cut Redwood Trust from a “hold” rating to a “sell” rating in a research note on Monday, April 6th. JonesTrading reissued a “buy” rating and issued a $6.25 target price on shares of Redwood Trust in a research note on Tuesday, March 3rd. Keefe, Bruyette & Woods raised their price target on Redwood Trust from $5.75 to $7.00 and gave the company a “market perform” rating in a report on Wednesday, February 18th. Citigroup reaffirmed a “market perform” rating on shares of Redwood Trust in a research report on Wednesday, February 18th. Finally, JPMorgan Chase & Co. upgraded shares of Redwood Trust from a “neutral” rating to an “overweight” rating and set a $6.00 price target on the stock in a research note on Friday, January 23rd. Five research analysts have rated the stock with a Buy rating, four have given a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, Redwood Trust currently has a consensus rating of “Hold” and an average price target of $6.82.
View Our Latest Report on RWT
Redwood Trust Company Profile (Get Free Report)
Redwood Trust, Inc (NYSE:RWT) is a publicly traded real estate investment trust specializing in the U.S. residential mortgage market. Headquartered in Mill Valley, California, the company focuses on investing in a diversified portfolio of residential mortgage assets, including whole loans, agency and non-agency mortgage-backed securities, and structured credit products.
The company’s core activities encompass the acquisition, financing, and management of prime residential mortgage whole loans and mortgage-backed securities.
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Key Takeaways Redwood Trust is set to report Q1'26 earnings on April 29, with EPS estimated to rise y/y to 28 cents.RWT mortgage banking income is likely to rise to $56.2M, aided by improved production despite rate volatility.Stabilizing funding costs and cost-cutting efforts likely drove Redwood Trust's net interest income growth. Redwood Trust, Inc. (RWT - Free Report) 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
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 PerformanceThe 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 TrustOur 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 PeersAGNC Investment Corp. (AGNC - Free Report) 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 - Free Report) 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.
If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Redwood Trust (RWT - Free Report) . This company, which is in the Zacks REIT and Equity Trust industry, shows potential for another earnings beat.
When looking at the last two reports, this specialty finance company has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 34.24%, on average, in the last two quarters.
For the last reported quarter, Redwood Trust came out with earnings of $0.33 per share versus the Zacks Consensus Estimate of $0.23 per share, representing a surprise of 43.48%. For the previous quarter, the company was expected to post earnings of $0.16 per share and it actually produced earnings of $0.2 per share, delivering a surprise of 25.00%.
Price and EPS Surprise
Thanks in part to this history, there has been a favorable change in earnings estimates for Redwood Trust lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Redwood Trust currently has an Earnings ESP of +20.00%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on April 29, 2026.
When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.
Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
, /PRNewswire/ -- Castlelake, L.P. ("Castlelake"), a global alternative investment firm specializing in asset-based private credit, and Redwood Trust Inc. (NYSE: RWT) ("Redwood" or the "Company"), a leader in expanding access to housing for homebuyers and renters, today announced the formation of a strategic joint venture designed to support the continued growth of Redwood's Sequoia platform and provide Castlelake with programmatic purchasing power for fully documented prime jumbo mortgage loans. The joint venture contemplates purchasing up to $8 billion of Sequoia-sourced prime jumbo loans, with flexibility to scale as opportunities emerge, including the acquisition of seasoned loans from bank balance sheets. Under the joint venture, Sequoia will source, aggregate, and diligence loans that meet defined eligibility criteria, with the aim of supporting consistent execution and high-quality asset selection.
"Castlelake is pleased to partner with Redwood and its Sequoia platform to provide our investors with access to what we expect to be high-quality, fully documented prime jumbo assets and to establish a relationship grounded in shared principles of disciplined underwriting and strong institutional governance," said Lucas Jackson, Head of North American Residential Mortgage Finance at Castlelake. "This transaction highlights Castlelake's granular, loan level approach to deploying capital into opportunities that we expect to create attractive, risk‑adjusted outcomes for our investors."
"Sequoia has experienced significant momentum over the past year, with loan acquisition volumes more than doubling as we continue to build share in the jumbo market," said Brooke Carillo, Executive Vice President and Chief Financial Officer at Redwood Trust. "We see a dynamic and expanding opportunity set ahead, and this initiative is aligned with our strategy of scaling our platforms alongside leading capital providers. Castlelake's large, diversified institutional capital base and experience in asset-based investing make them a strong partner as we continue to grow Sequoia."
Redwood is a leading participant in the prime jumbo mortgage market through its Sequoia platform, one of the longest-tenured non-agency correspondent platforms in the industry since Redwood was founded in 1994. Sequoia has consistently provided liquidity across market cycles, purchasing roughly $100 billion of loans and securitizing over $50 billion, reflecting its strong and well-established relationships with market-leading originators.
Castlelake is an experienced investor in the global residential real estate sector, and has acquired or financed more than $10 billion in residential and commercial loans since 2024. Supported by dedicated sector specialists and a long-standing focus on disciplined underwriting and institutional governance, the firm has invested through multiple market cycles and provides reliable, scalable capital for high-quality residential credit opportunities.
About Castlelake
Castlelake, L.P. is a global alternative investment manager specializing in asset-based private credit. Founded in 2005, Castlelake manages approximately $36 billion of assets on behalf of a diversified global investor base and is a strategic partner of Brookfield Asset Management Ltd., a leading global alternative investment manager with over $1 trillion of assets under management. The Castlelake team comprises approximately 250 experienced professionals, including 90 investment professionals, across eight offices in North America, Europe, the Middle East and Asia. For more information, please visit https://www.castlelake.com/.
About Redwood Trust, Inc.
Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company focused on several distinct areas of housing credit where we provide liquidity to growing segments of the U.S. housing market not well served by government programs. We deliver customized housing credit investments to a diverse mix of investors, through our best-in-class securitization platforms, whole-loan distribution activities, joint ventures and our publicly traded shares. We operate through three core residential housing-focused operating platforms — Sequoia, Aspire, and CoreVest — alongside our complementary Redwood Investments portfolio which is primarily composed of assets we source through these platforms. Redwood Investments also includes RWT Horizons®, our unified technology platform spanning internal AI innovation and strategic investments across the ecosystem, which supports our efforts to develop an AI-first operating model that enables compounding operational leverage and scalable growth. This reflects how we manage and organize our business and may differ from the manner in which our reportable segments are presented for financial reporting purposes.
Our goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, capital appreciation, and a commitment to technological innovation that facilitates risk-minded scale. Redwood Trust is internally managed and structured as a real estate investment trust ("REIT") for tax purposes. For more information about Redwood, please visit our website at www.redwoodtrust.com or connect with us on LinkedIn.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the joint venture's target acquisition volume of $8 billion of prime jumbo loans. Forward-looking statements involve numerous risks and uncertainties. Redwood's actual results may differ from Redwood's beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as "anticipate," "estimate," "will," "should," "expect," "believe," "intend," "seek," "plan" and similar expressions or their negative forms, or by references to strategy, plans, opportunities, or intentions. These forward-looking statements are subject to risks and uncertainties, including, among other things, those described in our Annual Report on Form 10-K for the year ended December 31, 2025 under the caption "Risk Factors". Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described from time to time in reports we file with the Securities and Exchange Commission, including reports on Forms 10-K, 10-Q and 8-K. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
MILL VALLEY, Calif.--(BUSINESS WIRE)--Redwood Trust, Inc. (NYSE:RWT; "Redwood", the "Company"), a leader in expanding access to housing for homebuyers and renters, today reported its financial results for the quarter ended March 31, 2026.
First Quarter 2026 Highlights
On a consolidated basis, GAAP net loss was $(0.07) per basic and diluted common share. Non- GAAP Earnings Available for Distribution ("EAD") was $0.21 per share(1), an increase from the prior quarter and once again exceeding the Company’s dividend Demonstrated sustained momentum in Mortgage Banking despite a more volatile and uncertain macroeconomic backdrop Mortgage Banking production reached a record $8.5 billion, up from $7.3 billion in the previous quarter and marking a third consecutive quarterly record(2) Gross margins remained within targeted ranges despite increased market volatility late in the quarter from changes in interest rates and mortgage spreads Distribution remained strong across platforms, supported by record securitization activity and continued momentum in whole loan sales, enabling efficient risk transfer and consistent market access Variability between Consolidated GAAP and EAD results primarily reflects market-driven changes in portfolio valuations rather than underlying operating performance Key Financial First Quarter 2026 Results and Metrics
GAAP book value per common share was $7.12 at March 31, 2026, compared to $7.36 per share at December 31, 2025 Economic return on book value of (0.8)% for the first quarter 2026(3) GAAP net loss of $(7.3) million or $(0.07) per basic and diluted common share Non-GAAP Earnings Available for Distribution ("EAD") of $27.1 million or $0.21 per basic common share(1) Non-GAAP Core Segments Earnings Available for Distribution ("Core Segments EAD") of $36.5 million, or $0.28 per basic common share(4) Declared and paid a regular quarterly dividend of $0.18 per common share “We delivered a third consecutive quarter of record mortgage banking volume, as Sequoia and Aspire continued to scale while maintaining disciplined margins,” said Christopher Abate, Chief Executive Officer of Redwood Trust. “What stands out in this environment is not just the level of production, but how we’re processing it using active distribution and technology to drive capital turnover and efficiently manage risk. As we expand our product set and deepen relationships across our ecosystem, we are seeing sustained demand from institutional investors seeking consistent access to the high-quality assets we source.”
Three Months Ended
3/31/2026
12/31/2025
Financial Performance
Book Value per Common Share
$
7.12
$
7.36
Economic Return on Book Value (3)
(0.8
)%
2.6
%
Net (Loss) Income per Basic Common Share
$
(0.07
)
$
0.13
Non-GAAP EAD per Basic Common Share (non-GAAP) (1)
$
0.21
$
0.20
Non-GAAP Core Segments EAD per Basic Common Share (4)
$
0.28
$
0.33
Dividends per Common Share
$
0.18
$
0.18
Q1 2026 Segment Highlights (5) GAAP Segment Net (Loss) Income Results Summary
($ in millions)
Three Months Ended
3/31/2026
12/31/2025
Core Segments:
Mortgage Banking Platforms:
Sequoia Mortgage Banking
$
37.8
$
33.3
Aspire Mortgage Banking
2.3
3.3
CoreVest Mortgage Banking
(3.4
)
6.8
Total Mortgage Banking Platforms
$
36.7
$
43.5
Redwood Investments
(8.0
)
15.2
Total Core Segments
$
28.7
$
58.7
Legacy Investments
$
(13.1
)
$
(22.9
)
Corporate/Other
$
(22.9
)
$
(17.5
)
Total GAAP Net (Loss) Income
$
(7.3
)
$
18.3
Mortgage Banking Platforms
Total Mortgage Banking Platforms GAAP net income of $36.7 million Generated 38% annualized return on capital ("ROC")(6) Continued expansion across platforms, including Sequoia’s new medical professional loan program and Aspire’s inaugural non-QM securitization, supporting volume growth and expanded distribution capabilities Aspire Mortgage Banking reported as a separate segment beginning in the first quarter of 2026 Sequoia Mortgage Banking(5)
Gain on sale margin of 96 basis points, at the higher end of the Company’s target range, and partially impacted by market volatility late in the first quarter Locked $6.5 billion of loans, up 22% from the fourth quarter 2025 and 67% from the first quarter 2025(7) Distributed $5.5 billion of loans through a combination of securitizations ($4.6 billion) and whole loan sales ($915 million), a 35% increase from the prior quarter Completed a record level of securitization activity, including the first ever securitization backed by medical professional loans Cost per loan improved to 18 basis points in the first quarter(8), compared to 26 basis points in the prior quarter, reflecting continued operating scale benefits Aspire Mortgage Banking(5)
Gain on sale margins of 73 basis points, compared to 92 basis points in the fourth quarter 2025 Lock volume of $1.6 billion reflects incremental growth from the fourth quarter and strong underlying demand for Aspire products from a growing network of loan sellers(7) Distributed $1.0 billion of loans through a combination of securitizations ($391 million) and whole loan sales ($656 million), a 44% increase from the prior quarter Expanded distribution capabilities through issuance of Aspire’s inaugural securitization CoreVest Mortgage Banking(5)
Segment GAAP net loss of $(3.4) million included $5.0 million of expenses related to organizational changes during the quarter, impacting comparability to the prior quarter. Non-GAAP EAD was $1.8 million Funded $432 million of loans (61% bridge and 39% term), a 6% decrease from the fourth quarter 2025 and a 10% decrease from the first quarter 2025 Distributed $694 million of newly-originated loans through whole loan sales, securitizations and sales to joint ventures ("JVs"), up 19% from the fourth quarter 2025 Volume reflected a more cautious approach late in the quarter, with intentional pipeline discipline during March volatility and heightened month-end activity, as we worked closely with our borrowers to manage execution in response to evolving investor demand Redwood Investments
Generated a segment GAAP net loss of $(8.0) million Results were primarily driven by unrealized market-related valuation changes during the quarter, partially offset by net interest income from portfolio investments Redwood Investments recourse leverage ratio increased to 1.1x at March 31, 2026, from 1.0x at December 31, 2025(10) Legacy Investments
Segment GAAP net loss of $(13.1) million Continued resolution activity within the legacy bridge portfolio supported capital redeployment and a reduction in portfolio exposure Segment capital allocation decreased to 15% of total invested capital, compared to 19% at December 31, 2025 Closed a $225 million securitization backed by a mix of performing/non-performing bridge loans which included $66 million of loans from the legacy investments portfolio Legacy Investments recourse leverage ratio of 1.6x at March 31, 2026(11) Capital and Financing
Maintained strong liquidity and stable recourse leverage, supporting continued investment in operating platforms Unrestricted cash and cash equivalents of $202 million at March 31, 2026 Recourse debt of $4.7 billion at March 31, 2026 compared to $4.4 billion at December 31, 2025(12) Increased overall warehouse capacity and added a new financing counterparty, supporting continued scale across the mortgage operating platforms Renewed or established over $2.8 billion in total financing capacity Total excess warehouse financing capacity of $3.9 billion at March 31, 2026 Tightened financing spreads and improved advance rates across key facilities Earnings available for distribution ("EAD"), EAD per share and EAD ROE are non-GAAP measures. See Non-GAAP Disclosures section that follows for additional information on these measures. Mortgage Banking refers to the combined performance or data related to Sequoia Mortgage Banking, Aspire Mortgage Banking and CoreVest Mortgage Banking segments. Production consists of loan locks from Sequoia Mortgage Banking and Aspire Mortgage Banking, as well as loan fundings from CoreVest Mortgage Banking. Economic return on book value is based on the period change in GAAP book value per common share plus dividends declared per common share in the period. Core Segments EAD is a non-GAAP measure used to present management’s non-GAAP analysis of the combined performance of the Company’s mortgage banking platforms and related investments (which consist of the Company’s Sequoia Mortgage Banking, Aspire Mortgage Banking, CoreVest Mortgage Banking and Redwood Investments segments), inclusive of an allocated portion of the Company’s Corporate segment relating to those Core Segments. Core Segments EAD excludes the Company’s Legacy Investments segment and excludes an allocated portion of the Company’s Corporate segment relating to the Legacy Investments segment. Core Segments EAD per basic common share and Core Segments EAD ROE are also non-GAAP financial measures and are calculated using Core Segments EAD. See Non-GAAP Disclosures section that follows for additional information on these measures. Beginning in the first quarter of 2026, we revised our segment reporting to (i) present Aspire Mortgage Banking as a new reportable segment separate from our Sequoia Mortgage Banking segment and (ii) allocate corporate financing costs to our Sequoia, Aspire, CoreVest Mortgage Banking, Redwood Investments and Legacy Investments segments. This change had no impact on the consolidated financial statements and all prior period amounts were conformed to the current presentation. ROC for the combined Mortgage Banking platforms is a non-GAAP measure calculated as annualized net income for the Company’s combined Mortgage Banking platforms divided by the average capital utilized by the combined Mortgage Banking platforms for the period. Average capital utilized represents management's internal estimate of the average capital deployed to support the activities of each segment and for Q1'26 the combined Mortgage Banking platform average capital was $386 million.
Beginning in the first quarter of 2026, we revised our segment reporting to allocate corporate financing costs to our Sequoia, Aspire, CoreVest Mortgage Banking, Redwood Investments and Legacy Investments segments. This change had no impact on the consolidated financial statements and all prior period amounts were conformed to the current presentation. Lock volume represents loans identified for purchase from loan sellers. Lock volume does not account for potential fallout from pipeline that typically occurs through the lending process. Cost per loan for the Sequoia Mortgage Banking segment is calculated as general and administrative expenses and loan acquisition costs of this segment divided by loan purchase commitments of this segment. EAD ROC for a segment is calculated as non-GAAP segment EAD annualized divided by average capital utilized for the segment during the period. Non-GAAP EAD is defined as: GAAP net income (loss) available (related) to common stockholders adjusted to: (i) exclude investment fair value changes, net; (ii) exclude realized gains and losses; (iii) exclude acquisition related expenses; (iv) exclude certain organizational restructuring charges (as applicable); and (v) adjust for the hypothetical income taxes associated with these adjustments. Average capital utilized represents management's internal estimate of the average economic capital allocated to support the activities of each segment. Redwood Investments recourse leverage ratio is defined as recourse debt at Redwood Investments divided by capital invested. At March 31, 2026 recourse debt excludes $20.5 billion of consolidated securitization debt (ABS issued and servicer advance financing), other liabilities and other debt that is non-recourse to Redwood at Redwood Investments. Capital invested in our Redwood Investments segment at March 31, 2026 was $510 million. Legacy Investments recourse leverage ratio is defined as recourse debt at Legacy Investments divided by capital invested. At March 31, 2026 recourse debt excludes $181 million of consolidated securitization debt (ABS issued), other liabilities and other debt that is non-recourse to Redwood at Legacy Investments. Capital invested in our Legacy Investments segment at March 31, 2026 was $242 million. At March 31, 2026, and December 31, 2025, recourse debt excluded $21.2 billion and $18.3 billion, respectively, of consolidated securitization debt (ABS issued and servicer advance financing), other liabilities and other debt that is non-recourse to Redwood, and tangible stockholders' equity excluded $32 million and $34 million, respectively, of goodwill and intangible assets. First Quarter 2026 Redwood Review and Supplemental Tables Available Online
A further discussion of Redwood's business and financial results is included in the first quarter 2026 Shareholder Letter and Redwood Review which are available under "Financial Info" within the Investor Relations section of the Company’s website at redwoodtrust.com/investor-relations. Additional supplemental financial tables can also be found within this section of the Company's website.
Conference Call and Webcast
Redwood will host an earnings call today, April 29, 2026, at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time to discuss its first quarter 2026 financial results. The number to dial in order to listen to the conference call is 1-877-423-9813 in the U.S. and Canada. International callers must dial 1-201-689-8573. A replay of the call will be available through midnight on Wednesday, May 13, 2026, and can be accessed by dialing 1-844-512-2921 in the U.S. and Canada or 1-412-317-6671 internationally and entering access code #13759155.
The conference call will be webcast live in listen-only mode through the News & Events section of Redwood’s Investor Relations website at https://www.redwoodtrust.com/investor-relations/news-events/events. To listen to the webcast, please go to Redwood's website at least 15 minutes before the call to register and to download and install any audio software needed. An audio replay of the call will also be available on Redwood's website following the call. Redwood plans to file its Quarterly Report on Form 10-Q with the Securities and Exchange Commission by Monday, May 11, 2026, and also make it available on Redwood’s website.
REDWOOD TRUST, INC.
Consolidated Income Statements (1)
Three Months Ended
($ in millions, except share and per share data)
3/31/26
12/31/25
Net Interest Income
$
34.7
$
25.9
Non-interest income
Mortgage banking activities, net
32.0
53.1
Investment fair value changes, net
(23.2
)
(0.5
)
HEI income, net
7.1
3.0
Servicing income, net
8.0
3.6
Fee income, net
2.9
1.8
Other income, net
2.4
2.2
Realized gains, net
—
(1.8
)
Total non-interest income, net
$
29.2
$
61.3
General and administrative expenses
(49.4
)
(40.8
)
Portfolio management costs
(8.7
)
(4.8
)
Loan acquisition costs
(6.7
)
(5.4
)
Other expenses
(7.1
)
(8.2
)
Benefit from (Provision for) income taxes
2.5
(8.0
)
Net (loss) income
$
(5.5
)
$
20.0
Dividends on preferred stock
(1.8
)
(1.8
)
Net (loss) income (related) available to common stockholders
$
(7.3
)
$
18.3
Weighted average basic common shares (thousands)
124,769
126,295
Weighted average diluted common shares (thousands) (2)
124,769
126,570
(Loss) Earnings per basic common share
$
(0.07
)
$
0.13
(Loss) Earnings per diluted common share
$
(0.07
)
$
0.13
Regular dividends declared per common share
$
0.18
$
0.18
REDWOOD TRUST, INC.
Consolidated Balance Sheets (1)
($ in millions, except share and per share data)
3/31/26
12/31/25
Residential consumer loans
$
21,300
$
17,936
Residential investor loans
3,311
3,617
Real estate securities
476
423
Home equity investments (HEI)
341
330
Servicing investments
300
302
Strategic investments
107
102
Cash and cash equivalents
202
256
Other assets
779
736
Total assets
$
26,816
$
23,701
Asset-backed securities issued, net
$
20,418
$
17,492
Debt obligations, net
4,867
4,799
Other liabilities
574
427
Total liabilities
$
25,859
$
22,718
Stockholders' equity
957
983
Total liabilities and equity
$
26,816
$
23,701
Common shares outstanding at period end (thousands)
125,015
124,460
GAAP book value per common share
$
7.12
$
7.36
Segment Financial Information(1)(2)
Three Months Ended March 31, 2026
(In Millions)
Sequoia
Mortgage
Banking
Aspire
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Legacy
Investments
Corporate/
Other
Total
Interest income
$
61.3
$
18.4
$
4.2
$
268.7
$
4.0
$
0.3
$
356.9
Interest expense
(36.3
)
(14.8
)
(2.1
)
(256.3
)
(12.7
)
—
(322.2
)
Net interest income (expense)
25.0
3.6
2.1
12.4
(8.7
)
0.3
34.7
Non-interest income (loss)
Mortgage banking activities, net
22.1
2.7
7.2
—
—
—
32.0
Investment fair value changes, net
—
—
(0.3
)
(15.4
)
(7.5
)
—
(23.2
)
HEI income, net
—
—
—
0.6
6.5
—
7.1
Servicing Income, net
—
—
—
8.0
—
—
8.0
Fee Income, net
—
—
2.8
0.2
(0.1
)
—
2.9
Other income, net
—
—
0.6
0.9
1.0
—
2.4
Realized gains, net
—
—
—
—
—
—
—
Total non-interest income, net
22.1
2.7
10.4
(5.8
)
(0.1
)
—
29.2
General and administrative expenses
(7.0
)
(2.5
)
(13.0
)
(3.4
)
—
(23.5
)
(49.4
)
Portfolio management costs
—
—
—
(4.2
)
(4.5
)
—
(8.7
)
Loan acquisition costs
(2.8
)
(1.0
)
(2.8
)
—
—
—
(6.7
)
Other expenses
—
—
(2.0
)
(5.1
)
—
—
(7.1
)
Benefit from (Provision for) income taxes
1.2
(0.3
)
2.1
(1.4
)
0.6
0.3
2.5
Net Income (Loss)
$
38.4
$
2.5
$
(3.3
)
$
(7.3
)
$
(12.8
)
$
(22.9
)
$
(5.5
)
Preferred Dividends
(0.5
)
(0.2
)
(0.1
)
(0.7
)
(0.3
)
—
(1.8
)
Net income (loss) available (related) to common stockholders
$
37.8
$
2.3
$
(3.4
)
$
(8.0
)
$
(13.1
)
$
(22.9
)
$
(7.3
)
Total Assets
$
2,573.7
$
891.5
$
329.3
$
21,903.5
$
945.0
$
172.7
$
26,815.8
Three Months Ended December 31, 2025
(In Millions)
Sequoia
Mortgage
Banking
Aspire
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Legacy
Investments
Corporate/
Other
Total
Interest income
$
52.3
$
14.7
$
6.3
$
248.6
$
4.7
$
0.5
$
327.0
Interest expense
(34.3
)
(11.8
)
(4.3
)
(233.7
)
(16.9
)
—
(301.0
)
Net interest income (expense)
17.9
2.9
2.0
14.9
(12.2
)
0.5
25.9
Non-interest income (loss)
Mortgage banking activities, net
35.2
5.2
12.7
—
—
—
53.1
Investment fair value changes, net
—
—
—
7.6
(8.1
)
—
(0.5
)
HEI income, net
—
—
—
0.5
2.5
—
3.0
Servicing Income, net
—
—
—
3.6
—
—
3.6
Fee Income, net
—
—
1.7
0.2
(0.1
)
—
1.8
Other income, net
—
—
1.9
0.8
(0.6
)
—
2.2
Realized gains, net
—
—
—
—
(1.8
)
—
(1.8
)
Total non-interest income, net
35.2
5.2
16.3
12.7
(8.1
)
—
61.3
General and administrative expenses
(10.0
)
(2.7
)
(8.9
)
(1.1
)
—
(18.1
)
(40.8
)
Portfolio management costs
—
—
—
(2.8
)
(2.0
)
—
(4.8
)
Loan acquisition costs
(2.1
)
(0.7
)
(2.7
)
—
—
—
(5.4
)
Other expenses
—
—
(2.0
)
(6.2
)
—
—
(8.2
)
Provision for income taxes
(7.3
)
(1.1
)
2.3
(1.8
)
(0.2
)
0.2
(8.0
)
Net Income (Loss)
$
33.8
$
3.5
$
7.0
$
15.7
$
(22.5
)
$
(17.5
)
$
20.0
Preferred Dividends
(0.5
)
(0.2
)
(0.1
)
(0.6
)
(0.4
)
—
(1.8
)
Net income (loss) available (related) to common stockholders
$
33.3
$
3.3
$
6.8
$
15.2
$
(22.9
)
$
(17.5
)
$
18.3
Total Assets
$
2,411.8
$
909.3
$
357.4
$
18,789.6
$
943.3
$
289.7
$
23,701.1
Non-GAAP Disclosures
To supplement consolidated and segment financial information prepared and presented in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company also provides Earnings Available for Distribution (“EAD”), EAD Return on Equity ("EAD ROE"), Core Segments Earnings Available for Distribution (“Core Segments EAD”) and Core Segments EAD Return on Equity ("Core Segments EAD ROE") as non-GAAP measures.
Management believes these non-GAAP measures provide useful supplemental information to investors and management in evaluating the Company’s operating performance, facilitating comparisons to industry peers, and assessing the current income-generating capacity of the Company’s operating platforms as of the period presented, including the Company’s ability to pay dividends. These measures also assist in evaluating the Company’s ongoing transition to a more scalable and simplified business model, including the wind-down of legacy portfolio holdings within the Legacy Investments segment.
These non-GAAP measures should not be utilized in isolation, nor should they be considered as an alternative to GAAP net income (loss) available (related) to common stockholders, or other measurements of results of operations computed in accordance with GAAP or for federal income tax purposes.
Earnings Available for Distribution (“EAD”) and EAD ROE are non-GAAP financial measures that the Company has historically reported and continues to use to present management’s non-GAAP analysis of the operating performance of the Company’s different business segments. EAD is defined, as GAAP net income (loss) available (related) to common stockholders, adjusted to (i) exclude investment fair value changes, net; (ii) exclude realized gains and losses; (iii) exclude acquisition-related expenses; (iv) exclude certain organizational restructuring charges, as applicable; and (v) reflect a hypothetical income tax adjustment associated with these items. EAD ROE is defined as EAD divided by average common equity.
Core Segments EAD and Core Segments EAD ROE represent management’s non-GAAP assessment of the combined performance of the Company’s mortgage banking platforms and related investments, which include the Sequoia Mortgage Banking, CoreVest Mortgage Banking, and Redwood Investments segments (collectively, the “Core Segments”), together with an allocated portion of the Corporate segment attributable to those operations.
Core Segments EAD excludes the Legacy Investments segment and the portion of the Corporate segment attributable to Legacy Investments. Core Segments EAD ROE is calculated as Core Segments EAD divided by the average capital utilized by the Core Segments during the period, which represents management’s internal estimate of the average economic capital allocated to support Core Segments activities.
Non-GAAP Disclosures (continued) Reconciliation of GAAP to non-GAAP EAD – First Quarter 2026 (1)
Three Months Ended March 31, 2026
($ in millions)
Sequoia
Mortgage
Banking
Aspire
Mortgage
Banking
CoreVest
Mortgage
Banking
Redwood
Investments
Total
Core Segments (4)
Legacy
Investments
Corporate/
Other (3)
Total
GAAP Net Income (Loss)
$
37.8
$
2.3
$
(3.4
)
$
(8.0
)
$
28.7
$
(13.1
)
$
(22.9
)
$
(7.3
)
EAD Adjustments:
Investment fair value changes, net (5)
—
—
—
15.4
15.4
7.5
—
22.9
Realized (gains)/losses, net (6)
—
—
—
—
—
—
—
—
Acquisition related expenses (7)
—
—
2.0
—
2.0
—
—
2.0
Organizational restructuring charges (8)
—
—
5.0
2.1
7.1
—
0.3
7.4
Tax effect of adjustments(9)
—
—
(1.8
)
3.8
2.0
0.1
(0.1
)
1.9
Non-GAAP EAD (2)
$
37.8
$
2.3
$
1.8
$
13.3
$
55.2
$
(5.5
)
$
(22.7
)
$
27.1
Adjustment for allocation of Corporate segment (10)
(7.0
)
(2.6
)
(1.1
)
(8.0
)
(18.7
)
(3.9
)
22.7
—
Non-GAAP EAD with Allocated Corporate Segment
$
30.8
$
(0.3
)
$
0.7
$
5.3
$
36.5
$
(9.4
)
$
—
$
27.1
Net Income (loss) (GAAP)
$
(7.3
)
EAD (Non-GAAP)
$
27.1
Core Segments EAD (Non-GAAP)
$
36.5
Net Income (loss) per Basic Common Share (GAAP)
$
(0.07
)
EAD per Basic common share (Non-GAAP)
$
0.21
Core Segments EAD per Basic Common Share (Non-GAAP) (11)
Certain totals may not foot due to rounding. Earnings Available for Distribution (“EAD”) is a non-GAAP measure that the Company has historically reported and continues to use to present management’s non-GAAP analysis of the operating performance of the Company’s different business segments. EAD is defined, as GAAP net income (loss) available (related) to common stockholders, adjusted to (i) exclude investment fair value changes, net; (ii) exclude realized gains and losses; (iii) exclude acquisition-related expenses; (iv) exclude certain organizational restructuring charges, as applicable; and (v) reflect a hypothetical income tax adjustment associated with these items. Beginning in the first quarter of 2026, we revised our segment reporting to allocate corporate financing costs to our Sequoia Mortgage Banking, Aspire Mortgage Banking, CoreVest Mortgage Banking, Redwood Investments and Legacy Investments segments. This change had no impact on the consolidated financial statements and all prior period amounts were conformed to the current presentation. Core Segments EAD and Core Segments EAD ROE are non-GAAP measures and are used to present management’s non-GAAP analysis of the combined performance of the Company’s mortgage banking platforms and related investments (which are defined as the "Core Segments" and which consist of the Company’s Sequoia Mortgage Banking, Aspire Mortgage Banking, CoreVest Mortgage Banking and Redwood Investments segments), inclusive of an allocated portion of the Company’s Corporate segment relating to those Core Segments. Core Segments EAD excludes the Company’s Legacy Investments segment and excludes an allocated portion of the Company’s Corporate segment relating to the Legacy Investments segment.
Core Segments EAD is defined as: GAAP net income (loss) available (related) to common stockholders adjusted to (i) exclude GAAP net loss from the Legacy Investments Segment, (ii) exclude the portion of the Corporate Segment allocation relating to the Legacy Investments segment, (iii) exclude investment fair value changes, net; (iv) exclude realized gains and losses; (v) exclude acquisition related expenses; (vi) exclude certain organizational restructuring charges (as applicable); and (vii) adjust for the hypothetical income taxes associated with these adjustments.
Refer to footnote 13 below for the definition of Core Segments EAD ROE. Investment fair value changes, net includes all amounts within that same line item in our consolidated statements of (loss) income that are attributable to each segment, which primarily represents both realized and unrealized gains and losses on our investments held in each segment and associated hedges. Realized and unrealized gains and losses on our HEI investments are reflected in a separate line item on our consolidated income statements titled "HEI income, net". Realized (gains)/losses, net includes all amounts within that line item on our consolidated statements of (loss) income that are attributable to each segment. Acquisition related expenses include transaction costs paid to third parties, as applicable, and the ongoing amortization of intangible assets related to the Riverbend and CoreVest acquisitions. Organizational restructuring charges for the first quarter of 2026 represent costs associated with employee severance and related transition expenses. Tax effect of adjustments represents the hypothetical income taxes associated with EAD adjustments used to calculate each segment EAD. Allocation of Corporate Segment is based on the average capital utilized by the segment during the period, which represents management’s internal estimate of the average economic capital allocated to support the activities of each segment. Core Segments EAD per basic common share is a non-GAAP measure and is defined as Core Segments EAD divided by basic weighted average common shares outstanding at the end of the period. ROE consists of consolidated GAAP net income annualized divided by average common equity for the period. Core Segments EAD ROE is a non-GAAP measure and is defined as Core Segments EAD annualized divided by average capital utilized by the Core Segments of $762 million and $726 million for the three months ended March 31, 2026 and December 31, 2025, respectively. Average capital utilized is management's internal estimate of the average economic capital allocated to support the activities of the Core Segments. About Redwood
Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company focused on several distinct areas of housing credit where we provide liquidity to growing segments of the U.S. housing market not well served by government programs. We deliver customized housing credit investments to a diverse mix of investors, through our best-in-class securitization platforms, whole-loan distribution activities, joint ventures and our publicly traded shares. We operate through three core residential housing-focused operating platforms — Sequoia, Aspire, and CoreVest — alongside our complementary Redwood Investments portfolio which is primarily composed of assets we source through these platforms. Redwood Investments also includes RWT Horizons®, our unified technology platform spanning internal AI innovation and strategic investments across the ecosystem, which supports our efforts to develop an AI-first operating model that enables compounding operational leverage and scalable growth. This reflects how we manage and organize our business and may differ from the manner in which our reportable segments are presented for financial reporting purposes.
Our goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, capital appreciation, and a commitment to technological innovation that facilitates risk-minded scale. Redwood Trust is internally managed and structured as a real estate investment trust ("REIT") for tax purposes. For more information about Redwood, please visit our website at www.redwoodtrust.com or connect with us on LinkedIn.
Cautionary Statement; Forward-Looking Statements:
This press release and the related conference call contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the expected timing for the filing of Redwood's Quarterly Report on Form 10-Q. Forward-looking statements involve numerous risks and uncertainties. Redwood's actual results may differ from Redwood's beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as “anticipate,” “estimate,” “will,” “should,” “expect,” “believe,” “intend,” “seek,” “plan” and similar expressions or their negative forms, or by references to strategy, plans, opportunities, or intentions. These forward-looking statements are subject to risks and uncertainties, including, among other things, those described in our Annual Report on Form 10-K for the year ended December 31, 2025 under the caption “Risk Factors”. Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected may be described from time to time in reports we file with the Securities and Exchange Commission, including reports on Forms 10-K, 10-Q and 8-K. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Redwood Trust (RWT - Free Report) came out with quarterly earnings of $0.28 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +1.82%. A quarter ago, it was expected that this specialty finance company would post earnings of $0.23 per share when it actually produced earnings of $0.33, delivering a surprise of +43.48%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Redwood Trust, which belongs to the Zacks REIT and Equity Trust industry, posted revenues of $34.7 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 9.90%. This compares to year-ago revenues of $27.9 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Redwood Trust shares have added about 4% since the beginning of the year versus the S&P 500's gain of 4.3%.
What's Next for Redwood Trust?While Redwood Trust has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Redwood Trust was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.31 on $36.23 million in revenues for the coming quarter and $1.20 on $142.96 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, REIT and Equity Trust is currently in the bottom 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Granite Point Mortgage Trust (GPMT - Free Report) , another stock in the same industry, has yet to report results for the quarter ended March 2026. The results are expected to be released on May 5.
This real estate investment trust is expected to post quarterly loss of $0.19 per share in its upcoming report, which represents a year-over-year change of +66.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Granite Point Mortgage Trust's revenues are expected to be $7.4 million, down 8% from the year-ago quarter.
Redwood Trust (RWT - Free Report) reported $34.7 million in revenue for the quarter ended March 2026, representing a year-over-year increase of 24.4%. EPS of $0.28 for the same period compares to $0.14 a year ago.
The reported revenue compares to the Zacks Consensus Estimate of $31.58 million, representing a surprise of +9.9%. The company delivered an EPS surprise of +1.82%, with the consensus EPS estimate being $0.28.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Redwood Trust performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Net interest income: $34.7 million compared to the $31.45 million average estimate based on two analysts.Total non-interest income (loss), net- Mortgage banking activities, net: $32 million versus the two-analyst average estimate of $56.19 million.Total non-interest income (loss), net- HEI income, net: $7.1 million compared to the $3.8 million average estimate based on two analysts.Total non-interest income (loss), net: $29.2 million versus the two-analyst average estimate of $59.74 million.View all Key Company Metrics for Redwood Trust here>>>
Shares of Redwood Trust have returned +2.5% over the past month versus the Zacks S&P 500 composite's +12.2% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
U.S. equity markets advanced for a fifth straight week - their longest winning streak since 2024 - as strong earnings, resilient data, and hopes for lasting Iran peace fueled optimism. Investors looked through another oil-price surge and inflationary pressure, focusing instead on corporate resilience and economic strength despite a complex macro backdrop shaped by geopolitical and policy uncertainty. The Fed held rates steady in an unusually fractured 8-4 vote, while Powell's plan to remain on the Board broke precedent and raised politically charged succession questions.
MILL VALLEY, Calif.--(BUSINESS WIRE)--Redwood Trust, Inc. (NYSE: RWT; “Redwood” or the “Company”) today announced the pricing of an underwritten public offering of $125,000,000 aggregate principal amount of its 9.75% senior notes due 2031 (the “Notes”). In connection with the offering, Redwood granted the underwriters a 30-day option to purchase up to an additional $18,750,000 aggregate principal amount of Notes, to cover over-allotments. The offering is expected to close on May 27, 2026, subje.
Redwood Trust, Inc. (NYSE: RWT; “Redwood” or the “Company”) today announced the pricing of an underwritten public offering of $125,000,000 aggregate principal amount of its 9.75% senior notes due 2031 (the “Notes”). In connection with the offering, Redwood granted the underwriters a 30-day option to purchase up to an additional $18,750,000 aggregate principal amount of Notes, to cover over-allotments. The offering is expected to close on May 27, 2026, subject to the satisfaction of certain closing conditions.
Redwood intends to apply to list the Notes on the New York Stock Exchange under the symbol “RWTR” and, if the application is approved, trading of the Notes on the New York Stock Exchange is expected to begin within 30 days after the Notes are first issued.
Redwood intends to use the net proceeds from the offering for general corporate purposes, including funding its operating businesses and investment activities, such as its Sequoia, Aspire, and CoreVest mortgage banking platforms, acquiring related assets for its Redwood Investments portfolio, and pursuing strategic acquisitions and investments.
The Notes will be senior unsecured obligations of Redwood. The Notes will bear interest at a rate equal to 9.75% per year, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on September 1, 2026. The Notes will mature on June 1, 2031. The Notes will be issued in minimum denominations of $25 and integral multiples of $25 in excess thereof or in units.
Redwood will have the right to redeem the Notes, in whole or in part, at its option at any time and from time to time, on or after June 1, 2028 at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Upon the occurrence of a change of control, Redwood will be required to make an offer to repurchase all outstanding Notes at a price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the repurchase date.
Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Investment Bank, Wells Fargo Securities, LLC, Goldman Sachs & Co. LLC and Piper Sandler & Co., are acting as joint book-running managers for the proposed offering. Mischler Financial Group, Inc. and Seaport Global Securities LLC are acting as co-managers for the proposed offering.
The public offering will be made pursuant to an automatic shelf registration statement on Form S-3 that was filed by Redwood with the Securities and Exchange Commission (“SEC”) and became effective on March 3, 2025, as amended on August 22, 2025. A preliminary prospectus supplement and accompanying prospectus relating to and describing the terms of the offering have been filed with the SEC and are available on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus supplement and accompanying prospectus may be obtained by contacting:
Morgan Stanley & Co. LLC
180 Varick Street
New York, NY 10014
Attention: Prospectus Department
Or by telephone: (866) 718-1649
Or by email: [email protected]
RBC Capital Markets, LLC
Attention: Transaction Management
Brookfield Place
200 Vesey Street, 8th Floor
New York, NY 10281-8098
Or by telephone: 866-375-6829
Or by email: [email protected]
UBS Investment Bank Attention: Prospectus Department
11 Madison Avenue
New York, NY 10010
Or by telephone: 833-481-0269
Wells Fargo Securities, LLC
608 2nd Avenue South, Suite 1000
Minneapolis, MN 55402
Attention: WFS Customer Service
Or by telephone: (800) 645-3751
Or by email: [email protected]
Goldman Sachs & Co. LLC
Attention: Prospectus Department
200 West Street
New York, NY 10282
Or by telephone: 866-471-2526
Or by email: [email protected]
Piper Sandler & Co.
Attention: Debt Capital Markets
1251 Avenue of the Americas, 6th Floor
New York, NY 10020
Or by email: [email protected]
This announcement shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.
About Redwood Trust
Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company focused on several distinct areas of housing credit where we provide liquidity to growing segments of the U.S. housing market not well served by government programs. We deliver customized housing credit investments to a diverse mix of investors, through our best-in-class securitization platforms, whole-loan distribution activities, joint ventures and our publicly traded shares. We operate through three core residential housing-focused operating platforms — Sequoia, Aspire, and CoreVest — alongside our complementary Redwood Investments portfolio which is primarily composed of assets we source through these platforms. Redwood Investments also includes RWT Horizons®, our unified technology platform spanning internal AI innovation and strategic investments across the ecosystem, which supports our efforts to develop an AI-first operating model that enables compounding operational leverage and scalable growth. This reflects how we manage and organize our business and may differ from the manner in which our reportable segments are presented for financial reporting purposes. Our goal is to provide attractive returns to shareholders through a stable and growing stream of earnings and dividends, capital appreciation, and a commitment to technological innovation that facilitates risk-minded scale. Redwood Trust is internally managed and structured as a real estate investment trust ("REIT") for tax purposes.
CAUTIONARY STATEMENT: This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, such as statements related to the offering, including the terms thereof, the anticipated closing date, the intention to apply to list the securities on the New York Stock Exchange and the expected use of the net proceeds. Forward-looking statements involve numerous risks and uncertainties. Redwood’s actual results may differ materially from those projected, and Redwood cautions investors not to place undue reliance on the forward-looking statements contained in this release. Forward-looking statements are not historical in nature and can be identified by words such as “anticipate,” “estimate,” “will,” “should,” “expect,” “believe,” “intend,” “seek,” “plan,” and similar expressions or their negative forms, or by references to strategy, plans, or intentions. No assurance can be given that the offering will be completed on the terms described, or at all, or that the net proceeds of the offering will be used as indicated. Completion of the offering on the terms described, the application to list the securities on the New York Stock Exchange and the application of the net proceeds, are subject to numerous conditions, risks and uncertainties, many of which are beyond the control of Redwood, including, among other things, those described in Redwood’s preliminary prospectus supplement dated May 19, 2026, the accompanying prospectus dated March 3, 2025, as amended on August 22, 2025, and the documents incorporated in the prospectus supplement and the prospectus by reference. Redwood undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260519834881/en/
Redwood Trust reported a Q1 2026 GAAP loss due to fair value declines in retained securitization tranches amid rising rates. RWT issued $125M in 9.75% senior unsecured notes due 2031, diversifying funding and capitalizing on open capital markets despite rate pressures. RWT.PR.A preferred shares yield 10% but offer limited upside and high duration risk, especially as long-term rates rise.
Redwood Trust recently issued RWTS, a 9.75% senior note maturing in 2031, now trading slightly below par. RWT's recourse leverage has doubled year-over-year to above 5x, raising concerns about capital structure and debt coverage. RWTS offers one of the highest yields among mREIT baby bonds, but increasing leverage and sector risks warrant caution.
