Rithm Capital in ‘early stages of a meaningful transformation,’ says BTIG

BTIG says Rithm Capital (RITM) is in the “early stages of a meaningful transformation” aimed at growing its asset management capabilities following the successful acquisition of Sculptor in November. The vision revolves around forming a corporate structure similar to the large incumbent alternative asset managers like Blackstone (BX) and Ares (ARES), which have fee-paying AUM as the primary source of earnings, the analyst tells investors. While the firm is not expecting Rithm to achieve a valuation near incumbent asset managers, the stock is trading only marginally above the level it acquired Sculptor in mid-November, suggesting very low growth expectations, says the analyst, who says the stock remains a top pick with a Buy rating and $13 price target on the shares.