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Strength Seen in Granite Point Mortgage Trust (GPMT): Can Its 6.3% Jump Turn into More Strength?

Granite Point Mortgage Trust GPMT shares soared 6.3% in the last trading session to close at $9.44. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9.9% loss over the past four weeks.

Granite Point witnessed a rise in the share price in last day’s trading session. The performance of the company is expected to improve in the quarters ahead on the back of rising interest rates. In its most aggressive hike since 1994, the Federal Reserve at the end of the two-day policy meeting on Jun 15 increased the interest rates by 75 basis points (bps). Given the rate increase in the past months, we believe that higher rates are tailwinds for Granite Point. Moreover, efforts to optimize capital deployment have likely led to investors optimistic stance.

This real estate investment trust is expected to post quarterly earnings of $0.22 per share in its upcoming report, which represents a year-over-year change of -18.5%. Revenues are expected to be $23.1 million, up 1.4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

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For Granite Point Mortgage Trust, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GPMT going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Granite Point Mortgage Trust is part of the Zacks REIT and Equity Trust industry. ACRES Commercial (ACR), another stock in the same industry, closed the last trading session 2.7% higher at $8.44. ACR has returned -22.3% in the past month.

For ACRES Commercial , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.23. This represents a change of +130% from what the company reported a year ago. ACRES Commercial currently has a Zacks Rank of #3 (Hold).


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