Two Harbors initiated with neutral view at UBS, here’s why

UBS initiated coverage of Two Harbors with a Neutral rating and $14.50 price target. The analyst initiated and assumed coverage of the agency-focused mortgage real estate investment trusts. The tightening of agency mortgage backed security spreads and improvement in agency mREIT prices in November has made the near-term risk-reward more balanced, the analyst tells investors in a research note. Longer-term the firm is more positive on the agency-focused mREITs, saying the current wide spread environment will produce a more attractive economic return environment than recent years.