Nomura Instinet analyst Matthew Howlett started Redwood Trust with a Buy rating and $17.50 price target. The analyst says the recent dissipation of the company's premium valuation has created an opportunity for investors. He initiated coverage of the U.S. Mortgage REITs industry with a positive outlook. The environment for levered mortgage-based operating models is the best it's been since the Taper Tantrum, Howlett tells investors in a research note. He thinks the space is poised to attract interest from "yield-starved investors amid a low, range-bound interest rate environment and expected yield curve steepening."