UPDATE: Sterne Agee Reiterates Buy Rating, Raises PT on Nationstar Mortgage Holdings
In a report published Wednesday, Sterne Agee Group reiterated its Buy rating on Nationstar Mortgage Holdings (NYSE: NSM), and raised its price target from $27.00 to $30.00.
Sterne Agee noted, “Based on management's guidance regarding likely boarding of new servicing, we are increasing our 2013 and 2014 EPS estimates from $2.50 to $2.75 and $3.00 per share. Based on this, we are increasing our price target from $27 to $30 per share. NSM reported GAAP EPS of $0.41 per share. There are two major items we reverse out of this in getting to the fully taxed core EPS figure of $0.48: a negative mark to market adjustment to the company's mortgage servicing asset of $11.1 million and pretax losses from the legacy assets of $7.5 million. Our fully taxed figure includes $4.1 million or ~ $0.03 per share in overhead tied to the boarding of the Aurora servicing. The company booked all of these expenses in the quarter but saw essentially no revenue benefit from this new servicing.”
Nationstar Mortgage Holdings closed on Tuesday at $27.60.
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Tags: Sterne Agee Group