UPDATE: Sterne Agee Reiterates Buy Rating, Raises PT on PHH Corporation
In a report published Monday, Sterne Agee Group reiterated its Buy rating on PHH Corporation (NYSE: PHH), and raised its price target from $20.00 to $24.00.
Sterne Agee noted, “PHH is on a path that we believe will result in the company's debt rating being reset at BB or BB+, stabilize/resolve put-back related cost, and support, during the course of 2013 or early in 2014, an ROE that will support a share price at or above tangible book value. Reflecting this, we are increasing our price target from $20 to $24 per share...We believe that PHH's current discount to tangible book value ($25.39) reflects investors' concern over put-back cost and the need for the company to establish a core ROE in the 10-12% range. Concerns over liquidity, are, in our view, a secondary item given management's recent success on this front. These are all issues which will be resolved/addressed over the foreseeable future. Our price target does not reflect the value likely to be received in the sale of the company or any monetization of Fleet. Our price target allows for a 95% discount to current tangible book and allows for any rate-related write-down in MSR carrying value.”
PHH Corporation closed on Friday at $18.46.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.