UPDATE: Sterne Agee Raises PT to $24 on Ocwen Financial Corporation on Growth and Outlook
Sterne Agee reiterates its Buy rating on Ocwen Financial Corporation (NYSE: OCN) and raises its price target from $18 to $24.
Sterne Agee notes, "The company's continued earnings growth, the potential for future servicing transfers, and the potential that OCN could put forth a meaningful bid this summer for some or all of ResCap increases our confidence in our 2014 EPS estimate of $3.00 and the potential of these shares to trade higher. … In our view, servicers should be valued at 6-8x the like EPS to be realized in 2014, a year that should see the bulk of any expected servicing transfers completed. Given OCN's long track record in this sector, its spot at the sector's low-cost producer, and its potential for partnering with other parties in bids for major platforms such as ResCap, we are valuing the company stock at the upper end of this or 8x."
OCN closed at $18.99 on Monday.
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