Two Harbors price target lowered to $11 from $13.50 at JPMorgan

JPMorgan lowered the firm’s price target on Two Harbors to $11 from $13.50 and keeps a Neutral rating on the shares. The spike in rates in Q3 drove spread volatility and lower residential mortgage real estate investment trust book value marks, the analyst tells investors in a research note. The firm views this “opportunistically” but notes volatility should remain elevated. Near-term risks have increased but the Federal Reserve is at or near the end of its tightening cycle and rates, contends JPMorgan. The firm says residential mortgage REITs face an increased probability of overtightening and elevated tail risk that could weigh on credit fundamentals.