RPT: Higher Earnings Power And Reverse Split Will Support Re Rating

Analysts have lifted their price target for Rithm Property Trust from about $3.50 to roughly $22.00. They cite updated views on fair value, discount rate, revenue growth, profit margins and future P/E, supported by recent Street research that introduced coverage with a Buy rating and a $24 target.

Analyst Commentary

Recent Street research has framed the higher target price for Rithm Property Trust as an attempt to align the stock more closely with analysts’ view of fair value, using updated assumptions around earnings power and valuation multiples.

Bullish Takeaways

Bullish analysts point to the US$24 target as support for a higher fair value range than previous estimates around US$22. This suggests confidence in the company’s ability to support a richer P/E over time.
The Buy rating is being used to justify a case that current pricing does not fully reflect the company’s potential revenue and margin profile, based on the latest Street models.
Some bullish analysts see room for execution on growth plans to close the gap between the current share price and the upper end of the US$22 to US$24 target range, if management delivers on revenue and profitability assumptions already included in forecasts.
The updated work on discount rates and earnings forecasts is being cited as a reason that Rithm Property Trust screens attractively against peers on forward P/E and implied return on capital in those models.

Bearish Takeaways

Bearish analysts focus on the risk that the current US$22 to US$24 target range relies on revenue growth and margin assumptions that may be difficult to achieve if execution falls short.
There is caution that the implied P/E embedded in the new targets could prove demanding if earnings or cash flows come in below the Street’s expectations.
Some bearish analysts highlight that the higher target partially reflects model inputs such as discount rates and terminal values, which can be sensitive to changes in macro conditions and investor risk appetite.
There is also concern that any delay in hitting the revenue and profitability milestones used in the research could lead to future revisions to fair value estimates and target prices.

What's in the News

Rithm Property Trust filed two Articles of Amendment in Maryland on December 30, 2025 to implement a 1 for 6 reverse stock split of its common stock. The amendments include cash payment for fractional shares and a temporary increase in par value per share to $0.06, followed by a return to $0.01 per share immediately after the first amendment became effective (Key Developments).
The company disclosed a 1 for 5.99988 stock split or significant stock dividend dated December 31, 2025, aligning with the reverse split mechanics described in the charter amendments (Key Developments).
In a buyback tranche update covering July 1, 2025 to September 30, 2025, Rithm Property Trust reported no share repurchases in that period. The company noted that it has completed repurchasing 525,039 shares in total, representing 2.27% for US$5.1m under the buyback first announced on March 3, 2020 (Key Developments).

Valuation Changes

Fair Value: The analyst fair value estimate moved from about US$3.50 to roughly US$22.00 per share, implying a materially higher assessed valuation range than before.
Discount Rate: The discount rate used in models shifted slightly from about 9.14% to roughly 9.17%, a very small adjustment in the assumed cost of capital.
Revenue Growth: The revenue growth input in the models moved from a very large figure of about 142.44% to roughly 54.36%, pointing to a more moderate growth assumption in the updated work.
Net Profit Margin: The profit margin assumption increased from about 19.79% to roughly 54.68%, indicating a much higher modeled level of profitability.
Future P/E: The future P/E multiple used in the analysis shifted lower from around 13.26x to about 7.61x, suggesting a reduced valuation multiple in the updated scenario.

Strong real estate market opportunities and prudent capital deployment are expected to drive revenue growth and boost long-term earnings.
Operational efficiencies, disciplined risk management, and non-dilutive capital strategies support sustainable margin expansion and scalable growth.
Heavy reliance on commercial real estate, scale limitations, and persistent valuation discounts raise concerns about growth, vulnerability to market shifts, and long-term profitability.

Catalysts

About Rithm Property Trust

Operates as a mortgage real estate investment trust in the United States.What are the underlying business or industry changes driving this perspective?

The company is poised to benefit from a growing and highly active investment pipeline in commercial real estate, with management emphasizing a $2 billion opportunity set and imminent deal closings, directly supporting future revenue growth as capital is prudently deployed into higher-yielding assets.
Persistent housing undersupply and strong demand for multifamily and urban property segments provide a long-term backdrop of asset value appreciation, boosting collateral quality and offering tailwinds for loan and property investments that can improve net earnings.
Rithm's transition to internal management and its commitment to not diluting existing shareholders (preferring non-dilutive raising of capital and joint ventures with third-party partners) positions the company for enhanced operational efficiency and sustainable net margin improvement as scale is achieved.
Advancing digitization in real estate finance and proactive risk management-evident in shedding underperforming legacy assets and focusing on clean, flexible balance sheet management-create a foundation for scalable earnings growth and better cost controls.
The current dislocation and repricing in real estate markets, combined with management's track record of capitalizing on similar cycles, provide a high-optional catalyst to acquire attractively priced assets, allowing for potential double-digit target returns and improved return on equity, with meaningful long-term impact on net income.

Rithm Property Trust Earnings and Revenue Growth

Rithm Property Trust Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Rithm Property Trust's revenue will grow by 148.2% annually over the next 3 years.
Analysts assume that profit margins will increase from -158.9% today to 27.6% in 3 years time.
Analysts expect earnings to reach $23.1 million (and earnings per share of $0.51) by about September 2028, up from $-8.7 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.1x on those 2028 earnings, up from -14.4x today. This future PE is lower than the current PE for the US Mortgage REITs industry at 14.3x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.14%, as per the Simply Wall St company report.

Rithm Property Trust Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Rithm Property Trust's small equity base (~$300 million) and modest recent earnings ($1.4 million GAAP income; EAD effectively zero) highlight significant scale challenges-if the company is unable to grow capital substantially, it may be unable to achieve targeted returns or meaningfully increase earnings, pressuring long-term revenue and profitability.
Persistent discount to book value (stock trading at ~$2.70 vs. $5.37 book) may reflect investor concerns about execution risk in capital deployment and skepticism over management's ability to realize underlying asset value, impacting long-term equity valuations and potential for price appreciation.
The heavy reliance on opportunistic commercial real estate investments exposes Rithm to macroeconomic headwinds, such as higher-for-longer interest rates and continued uncertainty in office and retail property demand post-pandemic, which could hurt asset values and lead to lower net interest margins and elevated earnings volatility.
Limited diversification beyond commercial real estate (with only secondary consideration given to other asset classes) makes Rithm vulnerable to secular shifts such as the decline in office demand due to remote work trends and structural shifts in retail, potentially reducing portfolio performance, revenue stability, and future earnings.
The business model's dependence on raising third-party and preferred equity without shareholder dilution suggests underlying funding constraints; if external capital proves insufficient or too expensive, Rithm may struggle to scale, leading to underwhelming return on equity and constraining sustainable dividend growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $4.0 for Rithm Property Trust based on their expectations of its future earnings growth, profit margins and other risk factors.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $83.7 million, earnings will come to $23.1 million, and it would be trading on a PE ratio of 10.1x, assuming you use a discount rate of 9.1%.
Given the current share price of $2.76, the analyst price target of $4.0 is 31.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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