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UPDATE: Sterne Agee Initiates PennyMac Mortgage Investment at Buy on Earnings Outlook

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Sterne Agee initiated coverage on PennyMac Mortgage Investment (NYSE: PMT) with a Buy rating and a $26.50 price target.

Sterne Agee noted, "Comments from the company suggest that the distressed mortgage market should remain robust and management has indicated that by the end of the year, its correspondent lender is expected to be purchasing $3.5 billion a month in new production. Servicing assets and MSRs should grow in lock step with this, and we would not be surprised to see the company bid on some of the larger, higher quality MSR portfolios that are likely to come up for sale over the next 12 months. Ally indicated it intends to sell $122 billion in relatively clean servicing. We estimate that this portfolio would add $0.50 to $.75 per share to EPS and dividend paying capacity if acquired by PMT."

PennyMac Mortgage Investment closed at $23.49 on Tuesday.

Latest Ratings for PMT

DateFirmActionFromTo
May 2014Compass PointMaintainsBuy
May 2014Wells FargoDowngradesOutperformMarket Perform
Feb 2014Compass PointMaintainsBuy

View More Analyst Ratings for PMT
View the Latest Analyst Ratings

Posted-In: Sterne AgeeAnalyst Color Initiation Pre-Market Outlook Analyst Ratings

 

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