B.Riley initiates coverage on Adamas Trust stock with Buy rating
B.Riley has initiated coverage on Adamas Trust, Inc. (NASDAQ:ADAM) with a Buy rating and a $9.00 price target, citing the company's shift to 63% Agency RMBS and expected growth in mortgage acquisitions. The investment firm projects adjusted EPS of $0.90 for FY25, $1.00 for FY26, and $1.15 for FY27, believing the stock can trade closer to its GAAP book value. Adamas Trust recently reported strong Q3 2025 earnings with a sixth consecutive quarterly EPS increase and a 47% rise in adjusted net interest income, maintaining a quarterly dividend of $0.23 per share.
How this was made
The 30-second read
Why it matters
The initiation of coverage with a Buy rating and a favorable price target suggests increased investor confidence, which could lead to short-term price appreciation.
Market read
The news is highly relevant for investors and traders interested in mortgage REITs and financial sector equities, especially those with exposure to US mortgage markets.
What to watch
Potential regulatory changes or credit risks in mortgage assets could adversely affect the company's performance and stock valuation.
Background
Adamas Trust has recently reported strong Q3 earnings, with consistent EPS growth and increased net interest income, prompting analyst coverage and a bullish outlook.
Ticker impact
Primary focus of the news, as the coverage is initiated on Adamas Trust, Inc.
Moderate upward price movement over the next 6-12 months, contingent on continued earnings growth and market conditions.
The analyst's positive outlook is backed by recent earnings growth, strategic shifts in asset composition, and a favorable valuation target, indicating a solid fundamental basis for potential appreciation.
Market effects
Potential positive impact on the financial services and mortgage REIT sectors due to increased investor confidence in mortgage-related assets.
Primarily US-focused, with possible spillover into related regional markets.
Limited; primarily relevant to US markets and investors.
Counterpoint
The positive outlook may be overly optimistic if mortgage spreads tighten or interest rates rise unexpectedly, compressing margins.
Key entities
- CompanyAdamas Trust, Inc.
A mortgage REIT focusing on agency-backed residential mortgage-backed securities.
- Financial Analyst FirmB.Riley
An investment firm initiating coverage and providing a positive outlook on Adamas Trust.
