Rithm (RITM) Upgraded to Strong Buy: Here's What You Should Know

Core Viewpoint - Rithm (RITM) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is effective for individual investors as it focuses on earnings estimate revisions, which are strongly correlated with near-term stock price movements [2][3]. - Institutional investors rely on earnings estimates to determine the fair value of stocks, leading to significant price movements based on their buying or selling actions [3]. Company Performance and Outlook - The upgrade for Rithm reflects an improvement in the company's underlying business, suggesting that investor sentiment may drive the stock price higher [4]. - For the fiscal year ending December 2024, Rithm is expected to earn $1.95 per share, which represents a decrease of 5.3% from the previous year, although estimates have increased by 2.7% over the past three months [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - Rithm's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [9].