What Happened?
Shares of commercial real estate finance company Walker & Dunlop (NYSE: WD) fell 7.5% in the afternoon session after reports revealed a surprisingly discouraging update on inflation at the wholesale level.
The report showed inflation was at 2.9% last month, significantly higher than economists had anticipated. This unexpected rise rattled investors, as it could influence the Federal Reserve's monetary policy. The central bank has been considering interest rate cuts, which are generally seen as a way to boost the economy and support investment prices. However, with inflation proving more persistent than expected, the Fed may be persuaded to delay these cuts for a longer period. This potential delay creates uncertainty in the market, leading to a broad sell-off as traders reassess the outlook for corporate profits and economic growth in a higher-rate environment.
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What Is The Market Telling Us
Walker & Dunlop’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 19.3% on the news that the company reported disappointing fourth-quarter 2025 financial results, missing Wall Street's expectations for both revenue and earnings per share. The commercial real estate finance company reported adjusted earnings per share (EPS) of $0.28, which fell a staggering 80.8% short of the $1.46 consensus estimate. This was also a significant drop from the $1.34 per share earned in the same quarter of the previous year. Revenue was another weak spot, coming in at $340 million, a slight miss against analyst expectations of $343.5 million and remaining flat year over year. The steep decline in profitability highlighted a challenging quarter for the company, leading to negative investor sentiment.
Walker & Dunlop is down 25.1% since the beginning of the year, and at $44.01 per share, it is trading 50% below its 52-week high of $87.97 from March 2025. Investors who bought $1,000 worth of Walker & Dunlop’s shares 5 years ago would now be looking at an investment worth $430.63.
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