UPDATE: Keefe, Bruyette & Woods Upgrades MGIC Investment Corp. to Outperform, Raises PT on Valuation

In a report published Tuesday, Keefe, Bruyette & Woods analyst Bose George upgraded the rating on

from Market Perform to Outperform, and raised the price target from $9.00 to $10.00. In the report, Keefe, Bruyette & Woods noted, “We are increasing our price targets for RDN and MTG to incorporate a higher P/E multiple on our normalized EPS estimates. We are also lowering the discount rate we use to present value our normalized EPS estimates to 10% from 11%. We take our target for RDN to $18.50 from $17 and our target for MTG to $10 from $9. We upgrade MTG to Outperform from Market Perform on valuation as our new price target equates to roughly 23% of upside in the shares. We are also adjusting our longer-term (2016-2018) estimates for RDN to incorporate dilution from its outstanding converts and lower loss ratios.” MGIC Investment Corp. closed on Monday at $8.11.