Should I Buy TWO? TWO 2026 Analysis

Should You Buy Two Harbors Investment Corp (TWO) Today? Analysis, Price Targets, and 2026 Outlook.

Conclusion

Hold

Latest Price

11.040

1 Day change

-7.54%

52 Week Range

14.280

Analysis Updated At

2026/01/30

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Not a good buy right now. TWO just suffered a sharp -13.69% regular-session drop and is trading below the key S1 support (11.761) near 11.47–11.48, with bearish momentum (MACD histogram negative and worsening) and a slightly negative short-term pattern outlook (model: -1.16% 1-week, -2.48% 1-month). While options positioning is bullish (call-skewed) and the UWM acquisition terms can provide a valuation anchor, the near-term setup is still weak heading into earnings (Feb 2 AH) and deal-related uncertainty/investigations. For an impatient buyer, the risk of further downside toward S2 (~11.06) is meaningful, so the better decision is to hold off rather than buy immediately.

Technical Analysis

Price/Trend: TWO is in a steep near-term downswing (regular session -13.69%) and is currently trading below the first support level S1 (11.761). The next notable downside level is S2 (11.062). Resistance pivots are higher (Pivot 12.894, R1 14.027), implying the stock would need a strong rebound to reclaim broken levels. Momentum: MACD histogram at -0.13 is below zero and negatively expanding, signaling increasing bearish momentum. RSI: RSI(6) ~22.6 indicates very oversold conditions (tactically this can bounce, but it does not by itself confirm a bottom). Moving averages: The MA stack is still bullish (SMA_5 > SMA_20 > SMA_200), suggesting the broader trend had been constructive, but the latest breakdown below support + bearish MACD implies the short-term trend has turned down despite the MA structure.

Intellectia Proprietary Trading Signals

AI Stock Picker: no signal on given stock today.
SwingMax: No signal on given stock recently.

Options Data

Bullish

Open Interest Put-Call Ratio

Bullish

Option Volume Put-Call Ratio

Sentiment: Options are call-skewed (OI put/call 0.58 and volume put/call 0.08), which is typically bullish/less defensive and suggests traders are positioning for upside or hedging is light. Volatility: 30D IV ~31.3 vs historical vol ~22.1, so options are pricing elevated event risk (consistent with upcoming earnings and deal uncertainty). IV percentile ~66 indicates IV is relatively high vs its own history. Activity: Total volume is low (71 contracts) but open interest is meaningful; today vs 30-day average volume shows elevated relative activity, though from a small base—so sentiment is positive, but not overwhelmingly confirmed by big flow.

Technical Summary

Sell

Buy

Positive Catalysts

Event-driven support: Pending UWM acquisition (share-exchange consideration) can act as an anchor for valuation and create merger-arb style demand if deal confidence improves.
Options positioning is bullish (call-skewed OI and volume), implying traders are leaning to upside outcomes.
Earnings catalyst (Feb 2 after-hours): a positive book value update/spread outlook could trigger a bounce from oversold levels.

Neutral/Negative Catalysts

Technical damage: Large one-day selloff and breakdown below S1 (11.
with bearish MACD momentum increases odds of continuation toward S2 (~11.06).
Deal uncertainty/headlines: News mentions shareholder-rights/transaction investigations and analysts citing uncertainty around the acquisition terms; this can cap immediate upside and increase volatility.
Earnings risk (Feb 2 AH): Mortgage REIT results can surprise via book value/spread/hedge performance; with elevated IV, the market is pricing a meaningful move.
Dividend cut headline (recently referenced in news) can pressure income-focused holders and keep sentiment fragile.

Financial Performance

Latest quarter provided: 2025/Q3. Growth/Profitability trend: Revenue fell sharply to ~$213.5M (down ~512% YoY as reported) and profitability remained weak with net income at -$141.5M (down ~43.5% YoY) and EPS -$1.36 (down ~43.8% YoY). Gross margin improved to ~43.4% (+73% YoY), but the overall picture is still negative earnings and volatile top-line—consistent with mortgage REIT cyclicality and rate/spread sensitivity. This weak Q3 backdrop increases sensitivity to the upcoming Q4 earnings update.

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

Recent trend: Analysts turned more cautious/neutral around the UWM deal. On 2026-01-23, JPMorgan kept Neutral but raised PT to $13.50 (from $10). UBS downgraded from Buy to Neutral while raising PT to $14 (from $11), explicitly citing uncertainty tied to the acquisition terms and expected close in Q2. Wall Street pros view (bull case): Higher price targets despite neutral ratings imply perceived valuation support from the deal structure and/or improved macro backdrop for REITs; upside exists if the deal progresses cleanly and book value/stability improves. Wall Street cons view (bear case): The downgrade to Neutral and repeated emphasis on uncertainty suggest limited conviction for immediate upside; deal-related complexity and near-term earnings/portfolio volatility are key overhangs. Influential/insider/political activity: Hedge funds and insiders are reported Neutral with no significant recent trends; no congress trading data available in the past 90 days.

TWO Should I Buy