Credit Suisse Maintains PennyMac Mortgage Investment (PMT) Outperform Rating
March 15, 2010 9:09 AM
Credit Suisse analyst Douglas Harter maintained his Outperform rating for shares of PennyMac Mortgage Investment (NYSE: PMT), with a price target of $19.
Although PennyMac Mortgage Investment lost money during its first two quarters as a public company, Harter thinks the company is on the verge of generating profits.
Harter believes that the announced loan purchases by PennyMac Mortgage Investment, along with its securities portfolio, can produce annual profits of 80 cents per share.
The Credit Suisse analyst wrote, "we expect the company to earn $2.80 in 2011 and 2012, roughly a 15% ROE. We see three key steps for the company to move from the current $0.80 of earnings power to our normalized earnings level: 1) deploying additional $100 million of capital, 2) redeploying securities into higher yielding opportunities, and 3) adding modest amounts of leverage to the portfolio."
