Residential mREITs "Updating Estimates and Price Targets: ADAM, EFC, PMT..."

Research evidence excerpt

Residential mREITs "Updating Estimates and Price Targets: ADAM, EFC, PMT..."

Global Research

21 May 2026ab

Residential mREITs Equities

AmericasUpdating Estimates and Price Targets: ADAM,

EFC, PMT & RITM Diversified Financial

Marissa Lobo

Analyst

marissa.lobo@ubs.com

+1-212-713 3922

ADAM (Neutral, $8.50 PT from $8.00)

Estimate Changes: We are raising our 2026 and 2027 adjusted Distributable

EPS (DE) estimates to $1.05 (from $0.98) and $1.07 (from $1.04), respectively,

following better-than-expected 1Q results. Our estimates are positively impacted

by a higher contribution from mortgage banking revenue and lower operating

expenses. ADAM is increasingly directing capital toward higher-yielding residential

credit assets, especially BPL-Rental loans, while maintaining a focus on flexible

capital deployment and expanding the Constructive platform to support recurring

income growth. For more details see our earnings note: 1Q Earnings: EAD Beat;

Book Value Performance Better than Peers

Price Target Change: We are increasing our price target to $8.50 (from $8) based

on ~80% (unchanged) of 12m forward adjusted book value. Our higher price

target reflects stronger than expected book value growth in 1Q. We maintain our

Neutral rating.

EFC (Neutral, $14 PT from $13.50)

Estimate Changes: We are maintaining our 2026 adjusted Distributable EPS (DE)

estimates at $1.97 and raising our 2027 estimates to $1.92, following 1Q results.

Our estimates are positively impacted by stronger portfolio growth and higher net

interest income, partially offset by higher operating expenses. EFC raised $117

million in a January block trade to redeem its Series A preferred stock which carried

a coupon above 9%, directly lowering the cost of capital while Longridge delivered