PennyMac Financial Services saw its fair value estimate cut from US$102.57 to US$90.57, a reduction of about US$12 per share, after several Wall Street firms lowered price targets following the company's Q2 earnings miss. Keefe Bruyette, Deutsche Bank and BTIG kept positive ratings on the stock even as they trimmed targets, with BTIG maintaining a Buy rating while adjusting its expectations for returns on equity and the timing of any share recovery. Piper Sandler moved to Neutral and Barclays to Equal Weight, both citing weaker production profitability and a lower return on equity outlook. The revised model now assumes a steeper revenue decline of 7.12%, compared with 4.96% previously, a net profit margin of 31.10% versus 31.85%, a future P/E of 7.93x versus 8.36x, and a discount rate of 12.54% versus 12.46%. Analysts pointed to a challenging mortgage backdrop, softer origination assumptions and uncertainty over when returns on equity might reach previously discussed levels.
Barclays PLC
Deutsche Bank Aktiengesellschaft
PennyMac Finl Svcs Inc
Piper Sandler Companies
CTBC Financial Holding Co Ltd