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Credit Suisse Just Reinstated New Residential At Outperform

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In a report published Tuesday, Credit Suisse analysts reinstated coverage of New Residential Investment Corp (NYSE: NRZ) with an Outperform rating, while raising the price target from $14 to $19. The reinstatement comes in the wake of the completion of the HLSS acquisition.

New Residential Investment has recently closed the purchase of the majority of assets of HLSS for $1.0 billion in cash and 28.2 million shares. A near-term dividend hike is expected in view of the potential benefits from the HLSS acquisition and an active MSR investment landscape.

New Residential Investment is expected to increase its quarterly dividend to $0.42, from $0.38 in the second quarter. "The servicing-related asset focus, plus non-Agency MBS with call rights, should allow for relative stability in returns and allow for further dividend yield compression," the analysts stated.

The core EPS estimates for 2015 and 2016 have been raised from $1.46 to $1.85 and from $1.35 to $1.80, respectively. The upward revision reflects accretion from the HLSS acquisition besides adjustments in-line with the management's definition of excluding the incentive fee.

Latest Ratings for NRZ

DateFirmActionFromTo
Jan 2018WedbushUpgradesNeutralOutperform
Oct 2017BarclaysMaintainsOverweight
Jun 2017WedbushDowngradesOutperformNeutral

View More Analyst Ratings for NRZ
View the Latest Analyst Ratings

Posted-In: Credit SuisseAnalyst Color Price Target Reiteration Analyst Ratings

 

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