First American Financial Stock (NYSE: FAF)

First American Financial (NYSE:FAF) Stock, Quote.Headers.trade-ideas

First American Financial

First American Financial Corp is a financial services business providing insurance through two segments: title insurance and related services and Home warranty. Title insurance and related services include real estate insurance, property closing services, third-party handling of real estate funds (escrow), risk mitigation, real estate data products, and related real estate transaction services. The home warranty segment provides residential service contracts that cover residential systems, such as heating and air conditioning systems, and certain appliances against failures that occur as the result of normal usage during the coverage period. Nearly all the company's revenue comes from the title insurance and related services segment in the United States.

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First American Financial (NYSE: FAF) reports a second-quarter 2024 operating income per share of $1.27, which beat the Zacks Consensus Estimate by 12.4%. The bottom line decreased 5.9% year over year.

First American Q2 Earnings Top, Revenues Miss Estimates

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First American Financial (NYSE: FAF) is poised to grow, given the increased demand among millennials for first-time home purchases. The expansion of its valuation and data businesses, as well as strength in commercial business and technological upgrades, is expected.

Here&#39;s Why Wait &amp; See Style Is Apt for First American

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First American Corporation (New) Common Stock

First American Financial Corp

FIRST AMERICANO FINCL CP by First Americano Financial Corp. (Elizabeth, NJ)

<p>The cash dividend is payable on September 27, 2024 to shareholders of record as of September 20, 2024.</p>


First American Financial Boosts Quarterly Cash Dividend By 2% From $0.53 To $0.54 Per Share

<p><strong>First American Financial's</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) short percent of float has fallen 14.09% since its last report. The company recently reported that it has <strong>1.27 million shares sold short</strong>, which is 1.28% of all regular shares that are available for trading. Based on its trading volume, <strong>it would take traders 1.55 days to cover their short positions on average.</strong></p>
<h3>Why Short Interest Matters</h3>
<p>Short interest is the number of shares that have been sold short but have not yet been covered or closed out. <a href="https://www.benzinga.com/money/how-to-short-a-stock/">Short selling</a> is when a trader sells shares of a company they do not own, with the hope that the price will fall. Traders make money from short selling if the price of the stock falls and they lose if it rises.</p>
<p>Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish.</p>
<p><strong>See Also:</strong> <a href="https://www.benzinga.com/short-interest"><strong>List of the most shorted stocks</strong></a></p>
<h3>First American Financial Short Interest Graph (3 Months)</h3>
<p><img src="https://www.benzinga.com/files/images/story/2024/1725976817_0.png" alt="short_fig" /></p>
<p>As you can see from the chart above the percentage of shares that are sold short for First American Financial has declined since its last report. This does not mean that the stock is going to rise in the near-term but traders should be aware that less shares are being shorted.</p>
<h3>Comparing First American Financial's Short Interest Against Its Peers</h3>
<p>Peer comparison is a popular technique amongst analysts and investors for gauging how well a company is performing. A company's peer is another company that has similar characteristics to it, such as industry, size, age, and financial structure. You can find a company's peer group by reading its 10-K, proxy filing, or by doing your own similarity analysis.</p>
<p>According to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, First American Financial's peer group average for short interest as a percentage of float is 2.05%, which means the company has <strong>less</strong> short interest than most of its peers.</p>
<p>Did you know that increasing short interest can actually be <strong>bullish</strong> for a stock? <a href="https://www.benzinga.com/money/how-to-make-money-on-a-short-squeeze/"><strong>This post by Benzinga Money explains how you can profit from it.</strong></a></p>
<p><em>This article was generated by Benzinga's automated content engine and was reviewed by an editor.</em></p>


Short Sellers

Short Ideas

How Is The Market Feeling About First American Financial?

<p>During the last three months, 6 analysts shared their evaluations of First American Financial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>), revealing diverse outlooks from bullish to bearish.</p>
<p>The table below provides a snapshot of their recent ratings, showcasing how sentiments have evolved over the past 30 days and comparing them to the preceding months.</p>
<table>
<thead>
<tr>
<th></th>
<th style="text-align: right;"><strong>Bullish</strong></th>
<th style="text-align: right;"><strong>Somewhat Bullish</strong></th>
<th style="text-align: right;"><strong>Indifferent</strong></th>
<th style="text-align: right;"><strong>Somewhat Bearish</strong></th>
<th style="text-align: right;"><strong>Bearish</strong></th>
</tr>
</thead>
<tbody>
<tr>
<td><strong>Total Ratings</strong></td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">4</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>Last 30D</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>1M Ago</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>2M Ago</strong></td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">2</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>3M Ago</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
</tbody>
</table>
<p>Providing deeper insights, analysts have established 12-month price targets, indicating an average target of $66.0, along with a high estimate of $72.00 and a low estimate of $61.00. Marking an increase of 1.03%, the current average surpasses the previous average price target of $65.33. </p>
<p><img src="https://www.benzinga.com/files/images/story/2024/1725462065_0.png" alt="price target chart" /></p>
<h2>Investigating Analyst Ratings: An Elaborate Study</h2>
<p>An in-depth analysis of recent analyst actions unveils how financial experts perceive First American Financial. The following summary outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.</p>
<table>
<thead>
<tr>
<th>Analyst</th>
<th>Analyst Firm</th>
<th>Action Taken</th>
<th>Rating</th>
<th>Current Price Target</th>
<th>Prior Price Target</th>
</tr>
</thead>
<tbody>
<tr>
<td>Bose George</td>
<td>Keefe, Bruyette &amp; Woods</td>
<td>Raises</td>
<td>Outperform</td>
<td>$72.00</td>
<td>$66.00</td>
</tr>
<tr>
<td>Bose George</td>
<td>Keefe, Bruyette &amp; Woods</td>
<td>Raises</td>
<td>Outperform</td>
<td>$66.00</td>
<td>$63.00</td>
</tr>
<tr>
<td>Mark Hughes</td>
<td>Truist Securities</td>
<td>Raises</td>
<td>Buy</td>
<td>$68.00</td>
<td>$65.00</td>
</tr>
<tr>
<td>John Campbell</td>
<td>Stephens &amp; Co.</td>
<td>Maintains</td>
<td>Overweight</td>
<td>$66.00</td>
<td>$66.00</td>
</tr>
<tr>
<td>Terry Ma</td>
<td>Barclays</td>
<td>Lowers</td>
<td>Equal-Weight</td>
<td>$61.00</td>
<td>$65.00</td>
</tr>
<tr>
<td>Bose George</td>
<td>Keefe, Bruyette &amp; Woods</td>
<td>Lowers</td>
<td>Outperform</td>
<td>$63.00</td>
<td>$67.00</td>
</tr>
</tbody>
</table>
<h3>Key Insights:</h3>
<ul>
<li><strong>Action Taken:</strong> In response to dynamic market conditions and company performance, analysts update their recommendations. Whether they 'Maintain', 'Raise', or 'Lower' their stance, it signifies their reaction to recent developments related to First American Financial. This insight gives a snapshot of analysts' perspectives on the current state of the company.</li>
<li><strong>Rating:</strong> Offering insights into predictions, analysts assign qualitative values, from 'Outperform' to 'Underperform'. These ratings convey expectations for the relative performance of First American Financial compared to the broader market.</li>
<li><strong>Price Targets:</strong> Analysts gauge the dynamics of price targets, providing estimates for the future value of First American Financial's stock. This comparison reveals trends in analysts' expectations over time.</li>
</ul>
<p>To gain a panoramic view of First American Financial's market performance, explore these analyst evaluations alongside essential financial indicators. Stay informed and make judicious decisions using our Ratings Table.</p>
<p><a href="https://www.benzinga.com/quote/FAF/analyst-ratings?utm_source=Benzinga Insights"><strong>Stay up to date on First American Financial analyst ratings.</strong></a></p>
<h2>Discovering First American Financial: A Closer Look</h2>
<p>First American Financial Corp is a financial services business providing insurance through two segments: title insurance and related services and Home warranty. Title insurance and related services include real estate insurance, property closing services, third-party handling of real estate funds (escrow), risk mitigation, real estate data products, and related real estate transaction services. The home warranty segment provides residential service contracts that cover residential systems, such as heating and air conditioning systems, and certain appliances against failures that occur as the result of normal usage during the coverage period. Nearly all the company's revenue comes from the title insurance and related services segment in the United States.</p>
<h3>First American Financial: Financial Performance Dissected</h3>
<p><strong>Market Capitalization Perspectives:</strong> The company's market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.</p>
<p><strong>Negative Revenue Trend:</strong> Examining First American Financial's financials over 3 months reveals challenges. As of 30 June, 2024, the company experienced a decline of approximately <strong>-2.1%</strong> in revenue growth, reflecting a decrease in top-line earnings. When compared to others in the Financials sector, the company faces challenges, achieving a growth rate lower than the average among peers.</p>
<p><strong>Net Margin:</strong> First American Financial's net margin is below industry averages, indicating potential challenges in maintaining strong profitability. With a net margin of <strong>7.19%,</strong> the company may face hurdles in effective cost management.</p>
<p><strong>Return on Equity (ROE):</strong> First American Financial's ROE falls below industry averages, indicating challenges in efficiently using equity capital. With an ROE of <strong>2.42%,</strong> the company may face hurdles in generating optimal returns for shareholders.</p>
<p><strong>Return on Assets (ROA):</strong> First American Financial's ROA stands out, surpassing industry averages. With an impressive ROA of <strong>0.78%</strong>, the company demonstrates effective utilization of assets and strong financial performance.</p>
<p><strong>Debt Management:</strong> First American Financial's debt-to-equity ratio is notably higher than the industry average. With a ratio of <b>0.47</b>, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.</p>
<h2>The Basics of Analyst Ratings</h2>
<p>Experts in banking and financial systems, analysts specialize in reporting for specific stocks or defined sectors. Their comprehensive research involves attending company conference calls and meetings, analyzing financial statements, and engaging with insiders to generate what are known as analyst ratings for stocks. Typically, analysts assess and rate each stock once per quarter.</p>
<p>Beyond their standard evaluations, some analysts contribute predictions for metrics like growth estimates, earnings, and revenue, furnishing investors with additional guidance. Users of analyst ratings should be mindful that this specialized advice is shaped by human perspectives and may be subject to variability.</p>
<p>This article was generated by Benzinga's automated content engine and reviewed by an editor.</p>


Expert Outlook: First American Financial Through The Eyes Of 6 Analysts

<p>Keefe, Bruyette &amp; Woods  analyst Bose George   maintains First American Financial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) with a Outperform and raises the price target from $66 to $72.</p>


Price Target

Keefe, Bruyette & Woods Maintains Outperform on First American Financial, Raises Price Target to $72

<p><strong>First American Financial's</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) short percent of float has risen 9.43% since its last report. The company recently reported that it has <strong>1.16 million shares sold short</strong>, which is 1.16% of all regular shares that are available for trading. Based on its trading volume, <strong>it would take traders 2.19 days to cover their short positions on average.</strong></p>
<h3>Why Short Interest Matters</h3>
<p>Short interest is the number of shares that have been sold short but have not yet been covered or closed out. <a href="https://www.benzinga.com/money/how-to-short-a-stock/">Short selling</a> is when a trader sells shares of a company they do not own, with the hope that the price will fall. Traders make money from short selling if the price of the stock falls and they lose if it rises.</p>
<p>Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish.</p>
<p><strong>See Also:</strong> <a href="https://www.benzinga.com/short-interest"><strong>List of the most shorted stocks</strong></a></p>
<h3>First American Financial Short Interest Graph (3 Months)</h3>
<p><img src="https://www.benzinga.com/files/images/story/2024/1722545110_0.png" alt="short_fig" /></p>
<p>As you can see from the chart above the percentage of shares that are sold short for First American Financial has grown since its last report. This does not mean that the stock is going to fall in the near-term but traders should be aware that more shares are being shorted.</p>
<h3>Comparing First American Financial's Short Interest Against Its Peers</h3>
<p>Peer comparison is a popular technique amongst analysts and investors for gauging how well a company is performing. A company's peer is another company that has similar characteristics to it, such as industry, size, age, and financial structure. You can find a company's peer group by reading its 10-K, proxy filing, or by doing your own similarity analysis.</p>
<p>According to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, First American Financial's peer group average for short interest as a percentage of float is 2.18%, which means the company has <strong>less</strong> short interest than most of its peers.</p>
<p>Did you know that increasing short interest can actually be <strong>bullish</strong> for a stock? <a href="https://www.benzinga.com/money/how-to-make-money-on-a-short-squeeze/"><strong>This post by Benzinga Money explains how you can profit from it.</strong></a></p>
<p><em>This article was generated by Benzinga's automated content engine and was reviewed by an editor.</em></p>


Peering Into First American Financial's Recent Short Interest

<p>Keefe, Bruyette &amp; Woods  analyst Bose George   maintains First American Financial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) with a Outperform and raises the price target from $63 to $66.</p>


Keefe, Bruyette & Woods Maintains Outperform on First American Financial, Raises Price Target to $66

<p>Truist Securities  analyst Mark Hughes   maintains First American Financial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) with a Buy and raises the price target from $65 to $68.</p>


Truist Securities Maintains Buy on First American Financial, Raises Price Target to $68

<p><strong>First American Financial </strong>(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/faf#NYSE">FAF</a>) reports a second-quarter 2024 operating income per share of $1.27, which beat the Zacks Consensus Estimate by 12.4%. The bottom line decreased 5.9% year over year.</p>
<p>The insurer&#39;s results reflect the benefits of the seasonal pick-up in demand despite challenging market conditions.</p>
<h3>Behind the Headlines</h3>
<p>Operating revenues of $1.6 billion dropped 2.1% year over year due to lower agent premiums and information and other. The top line missed the Zacks Consensus Estimate by 1.2%.</p>
<div class="chart_embed">
<h3>First American Financial Corporation Price, Consensus and EPS Surprise</h3>
<p><img alt="First American Financial Corporation Price, Consensus and EPS Surprise" src="https://staticx-tuner.zacks.com/images/charts/11/1721923696.png" style="height:265px; width:574px" title="" /></p>
<p>First American Financial Corporation price-consensus-eps-surprise-chart | First American Financial Corporation Quote</p>
<p>Investment income was $129.9 million in the first quarter, declining 4.5% year over year. The figure was lower than our estimate of $150 million.</p>
<p>Expenses inched down 0.9% to $1.5 billion. Our estimate was $1.5 billion.</p>
</div>
<h3>Segment Results</h3>
<p><strong>Title Insurance and Services</strong>: Total revenues fell 0.6% year over year to $1.5 billion. The downside was due to lower agent premiums and information and other. The figure was in line with our estimate.&nbsp;</p>
<p>Investment income of $126 million declined 11.3% year over year. The downside was primarily due to lower average interest-bearing escrow and tax-deferred property exchange balances, partly offset by higher interest income from the company&#39;s warehouse lending business.</p>
<p>Adjusted pretax margin contracted 70 basis points (bps) year over year to 11.9%. Title open orders dropped 2.8% to 169,600. Title closed orders fell 2.8% to 124,700. The average revenue per direct title order increased 0.9% to $11,700, primarily owing to a shift in the mix from lower premium default transactions to higher premium commercial transactions and an increase in the average revenue per order for purchase transactions.</p>
<p><strong>Home Warranty</strong>: Total revenues increased 0.3% to $106 million. The figure was higher than our estimate of $102.6 million. Pretax income of $16.5 million increased 15.4% year over year. The claim loss rate was 45.8% in the first quarter, contracting 340 bps due to lower claim severity, which was partially offset by higher claim frequency. The pretax margin was 15.4%, which expanded 200 bps year over year.</p>
<p><strong>Corporate</strong>: Net investment income was $4 million, down 50% year over year, primarily attributable to changes in the value of investments associated with the company&#39;s deferred compensation program. This amount was offset by lower personnel expenses reflecting returns on the plan participants&#39; investments.</p>
<p>Interest expenses were $23 million, up 9% year over year due to higher interest expenses in the company&#39;s warehouse lending business.</p>
<h3>Financial Update</h3>
<p>First American exited the quarter with cash and cash equivalents of $2 billion, down 43.2% from the end of 2023. Notes and contracts payable were $1.4 billion, up 0.4% from the end of 2023.</p>
<p>Stockholders&#39; equity was $4.7 billion, down 0.7% from the 2023-end level. The debt-to-capital ratio was 29.7.</p>
<p>FAF bought back shares worth $4 1million in the quarter. Through Jul 23, it repurchased an additional $15 million worth of shares.</p>
<p>Cash flow from operations was $267 million, down 0.7% year over year.</p>
<h3>Zacks Rank</h3>
<p>FAF currently carries a Zacks Rank #3 (Hold).</p>
<h3>Performance of Other Insurers</h3>
<p><strong>The Travelers Companies </strong>(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/trv#NYSE">TRV</a>) reported a second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. The bottom line skyrocketed from 6 cents in the year-ago quarter, driven by solid underlying results, net favorable prior-year reserve development and higher net investment income, partially offset by higher catastrophe losses. Travelers&#39; total revenues increased 12.4% from the year-ago quarter&#39;s figure to $11.3 billion, primarily driven by higher premiums. The top-line figure missed the Zacks Consensus Estimate by 1%.</p>
<p>Net written premiums increased 8% year over year to a record $11.1 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.4 billion. Travelers witnessed an underwriting loss of $65 million, narrower than a loss of $640 million incurred in the year-ago quarter. The combined ratio improved 630 bps year over year to 100.2 due to an improvement in the underlying combined ratio, higher net favorable prior-year reserve development and lower catastrophe losses, as a percentage of net earned premiums. The Zacks Consensus Estimate was pegged at 97.</p>
<p><strong>The Progressive Corporation</strong>&#39;s (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pgr#NYSE">PGR</a>) second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year. Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.</p>
<p>Net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion. The combined ratio improved by 850 bps from the prior-year quarter&#39;s level to 91.9.</p>
<p><strong>Selective Insurance Group, Inc</strong>. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/sigi#NASDAQ">SIGI</a>) reported a second-quarter 2024 operating loss of $1.10 per share against the Zacks Consensus Estimate for earnings of $1.56. The company reported an operating income of 99 cents per share in the prior-year quarter. The quarterly results reflected poor underwriting performance, unfavorable prior-year casualty reserve development and escalating costs, offset by higher premiums and net investment income.</p>
<p>Total revenues of $1.2 billion increased 15% from the year-ago quarter&#39;s figure, primarily due to higher premiums earned, net investment income and net premiums written. The top line missed the Zacks Consensus Estimate by 1.3%.</p>
<p><a href="https://www.zacks.com/stock/news/2309346/first-american-faf-q2-earnings-top-revenues-miss-estimates?cid=CS-BENZ-FT-analyst_blog|earnings_article-2309346">To read this article on Zacks.com click here.</a></p>


<p>Ratings for First American Financial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) were provided by 4 analysts in the past three months, showcasing a mix of bullish and bearish perspectives.</p>
<p>The table below offers a condensed view of their recent ratings, showcasing the changing sentiments over the past 30 days and comparing them to the preceding months.</p>
<table>
<thead>
<tr>
<th></th>
<th style="text-align: right;"><strong>Bullish</strong></th>
<th style="text-align: right;"><strong>Somewhat Bullish</strong></th>
<th style="text-align: right;"><strong>Indifferent</strong></th>
<th style="text-align: right;"><strong>Somewhat Bearish</strong></th>
<th style="text-align: right;"><strong>Bearish</strong></th>
</tr>
</thead>
<tbody>
<tr>
<td><strong>Total Ratings</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">3</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>Last 30D</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>1M Ago</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>2M Ago</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>3M Ago</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
</tbody>
</table>
<p>The 12-month price targets, analyzed by analysts, offer insights with an average target of $64.0, a high estimate of $66.00, and a low estimate of $61.00. This current average represents a 5.19% decrease from the previous average price target of $67.50. </p>
<p><img src="https://www.benzinga.com/files/images/story/2024/1721934072_0.png" alt="price target chart" /></p>
<h2>Analyzing Analyst Ratings: A Detailed Breakdown</h2>
<p>The analysis of recent analyst actions sheds light on the perception of First American Financial by financial experts. The following summary presents key analysts, their recent evaluations, and adjustments to ratings and price targets.</p>
<table>
<thead>
<tr>
<th>Analyst</th>
<th>Analyst Firm</th>
<th>Action Taken</th>
<th>Rating</th>
<th>Current Price Target</th>
<th>Prior Price Target</th>
</tr>
</thead>
<tbody>
<tr>
<td>John Campbell</td>
<td>Stephens &amp; Co.</td>
<td>Maintains</td>
<td>Overweight</td>
<td>$66.00</td>
<td>$66.00</td>
</tr>
<tr>
<td>Terry Ma</td>
<td>Barclays</td>
<td>Lowers</td>
<td>Equal-Weight</td>
<td>$61.00</td>
<td>$65.00</td>
</tr>
<tr>
<td>Bose George</td>
<td>Keefe, Bruyette &amp; Woods</td>
<td>Lowers</td>
<td>Outperform</td>
<td>$63.00</td>
<td>$67.00</td>
</tr>
<tr>
<td>John Campbell</td>
<td>Stephens &amp; Co.</td>
<td>Lowers</td>
<td>Overweight</td>
<td>$66.00</td>
<td>$72.00</td>
</tr>
</tbody>
</table>
<h3>Key Insights:</h3>
<ul>
<li><strong>Action Taken:</strong> In response to dynamic market conditions and company performance, analysts update their recommendations. Whether they 'Maintain', 'Raise', or 'Lower' their stance, it signifies their reaction to recent developments related to First American Financial. This insight gives a snapshot of analysts' perspectives on the current state of the company.</li>
<li><strong>Rating:</strong> Analyzing trends, analysts offer qualitative evaluations, ranging from 'Outperform' to 'Underperform'. These ratings convey expectations for the relative performance of First American Financial compared to the broader market.</li>
<li><strong>Price Targets:</strong> Understanding forecasts, analysts offer estimates for First American Financial's future value. Examining the current and prior targets provides insight into analysts' changing expectations.</li>
</ul>
<p>Understanding these analyst evaluations alongside key financial indicators can offer valuable insights into First American Financial's market standing. Stay informed and make well-considered decisions with our Ratings Table.</p>
<p><a href="https://www.benzinga.com/quote/FAF/analyst-ratings?utm_source=Benzinga Insights"><strong>Stay up to date on First American Financial analyst ratings.</strong></a></p>
<h2>Delving into First American Financial's Background</h2>
<p>First American Financial Corp is a financial services business providing insurance through two segments: title insurance and related services and Home warranty. Title insurance and related services include real estate insurance, property closing services, third-party handling of real estate funds (escrow), risk mitigation, real estate data products, and related real estate transaction services. The home warranty segment provides residential service contracts that cover residential systems, such as heating and air conditioning systems, and certain appliances against failures that occur as the result of normal usage during the coverage period. Nearly all the company's revenue comes from the title insurance and related services segment in the United States.</p>
<h3>Key Indicators: First American Financial's Financial Health</h3>
<p><strong>Market Capitalization:</strong> Indicating a reduced size compared to industry averages, the company's market capitalization poses unique challenges.</p>
<p><strong>Negative Revenue Trend:</strong> Examining First American Financial's financials over 3 months reveals challenges. As of 31 March, 2024, the company experienced a decline of approximately <strong>-1.49%</strong> in revenue growth, reflecting a decrease in top-line earnings. When compared to others in the Financials sector, the company faces challenges, achieving a growth rate lower than the average among peers.</p>
<p><strong>Net Margin:</strong> First American Financial's net margin lags behind industry averages, suggesting challenges in maintaining strong profitability. With a net margin of <strong>3.28%,</strong> the company may face hurdles in effective cost management.</p>
<p><strong>Return on Equity (ROE):</strong> First American Financial's ROE lags behind industry averages, suggesting challenges in maximizing returns on equity capital. With an ROE of <strong>0.97%,</strong> the company may face hurdles in achieving optimal financial performance.</p>
<p><strong>Return on Assets (ROA):</strong> First American Financial's ROA is below industry averages, indicating potential challenges in efficiently utilizing assets. With an ROA of <strong>0.3%,</strong> the company may face hurdles in achieving optimal financial returns.</p>
<p><strong>Debt Management:</strong> With a high debt-to-equity ratio of <strong>0.48</strong>, First American Financial faces challenges in effectively managing its debt levels, indicating potential financial strain.</p>
<h2>What Are Analyst Ratings?</h2>
<p>Analyst ratings serve as essential indicators of stock performance, provided by experts in banking and financial systems. These specialists diligently analyze company financial statements, participate in conference calls, and engage with insiders to generate quarterly ratings for individual stocks.</p>
<p>Some analysts publish their predictions for metrics such as growth estimates, earnings, and revenue to provide additional guidance with their ratings. When using analyst ratings, it is important to keep in mind that stock and sector analysts are also human and are only offering their opinions to investors.</p>
<p>This article was generated by Benzinga's automated content engine and reviewed by an editor.</p>


The Analyst Verdict: First American Financial In The Eyes Of 4 Experts

<p>Stephens &amp; Co.  analyst John Campbell   reiterates First American Financial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) with a Overweight and maintains $66 price target.</p>


Reiteration

Stephens & Co. Reiterates Overweight on First American Financial, Maintains $66 Price Target

<p>First American Financial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) reported quarterly earnings of $1.27 per share which beat the analyst consensus estimate of $1.16 by 9.48 percent. This is a 5.93 percent decrease over earnings of $1.35 per share from the same period last year.  The company reported quarterly sales of $1.612 billion which missed the analyst consensus estimate of $1.624 billion by 0.77 percent.  This is a 2.01 percent decrease over sales of $1.645 billion the same period last year.</p>


Earnings Beats

Earnings Misses

First American Financial Q2 2024 Adj EPS $1.27 Beats $1.16 Estimate, Sales $1.612B Miss $1.624B Estimate

<p><strong>First American Financial </strong>(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/faf#NYSE">FAF</a>) is poised to grow, given the increased demand among millennials for first-time home purchases. The expansion of its valuation and data businesses, as well as strength in commercial business and technological upgrades, is expected. These, along with solid growth projections, make the Zacks rank #3 (Hold) stock worth retaining.</p>
<h3>An Outperformer</h3>
<p>Shares have gained 8.5% in the past month, outperforming the industry&#39;s growth of 7.6%, the Finance sector&#39;s decline of 1% and the Zacks S&amp;P 500 composite&#39;s increase of 0.7%.</p>
<p><img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/ff/71942.jpg?v=482038030" /><br />
Image Source: Zacks Investment Research</p>
<h3>Optimistic Growth Projection</h3>
<p>The Zacks Consensus Estimate for 2024 earnings is pegged at $3.83, indicating an increase of 0.8% on 4.7% higher revenues of $6.3 billion. The consensus estimate for 2025 earnings is pegged at $5.12, indicating an increase of 33.8% on 10.2% higher revenues of $6.9 billion.<br />
We expect 2026 EPS to witness a three-year CAGR of 11.3%.</p>
<h3>Return on Equity</h3>
<p>Return on equity (ROE) is a measure of profitability, reflecting how efficiently a company is utilizing its shareholders&#39; funds. FAF&#39;s trailing 12-month ROE of 8.2% outperformed the industry average of 7.8%. &nbsp;</p>
<h3>Growth Drivers</h3>
<p>An increased demand for first-time home purchases among millennials continues to drive results at First American. It expects housing demand, improving economy and labor markets to drive home price appreciation. Thus, banking on growing leadership in title data, courtesy of proprietary data extraction, sturdy distribution relationships, prudent underwriting and continued investments in technology, FAF remains well poised for long-term growth.</p>
<p>Growing direct premiums, escrow fees and title agent premiums should continue to drive the top line. We expect the 2026 top line to increase at a three-year CAGR of 8.2%.</p>
<p>Strategic initiatives to strengthen its product offerings, intensify the company&#39;s focus on its core business and expand FAF&#39;s valuation and data businesses bode well. Also, the expansion of title plant assets and the upgrade of technology solutions drive increased efficiency.</p>
<h3>Impressive Dividend History and Share Buyback Plans</h3>
<p>First American has a solid track record of dividend increase, with the metric witnessing an eight-year (2016-2024) CAGR of 8.2%. FAF&#39;s dividend yield of 3.9% compares positively with the industry average of 0.3%.</p>
<p>The company also engaged in share buyback and had $210.4 million remaining under its authorization as of Mar 31, 2024.</p>
<h3>Risks</h3>
<p>Despite the upside potential, there are a few factors that investors should keep an eye on. A challenging real estate and mortgage industry weigh on First American. Transaction volumes suffer due to higher mortgage rates and slow inventory growth. A tough mortgage origination market is a concern.</p>
<p>Also, as the Fed intends to lower rates, the company estimates that for each 25-basis point decline in the Fed funds rate, the annualized investment income will decline $15 million. But the ultimate amount will fluctuate depending on the level of cash and escrow balances.</p>
<p>First American&#39;s debt levels have been increasing in the past few years, with the debt-to-capital ratio deteriorating. Its times interest earned compares unfavorably with the industry average.&nbsp;</p>
<h3>Stocks to Consider</h3>
<p>Some top-ranked stocks from the insurance industry are <strong>RLI Corporation </strong>(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/rli#NYSE">RLI</a>), <strong>Palomar Holdings </strong>(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/plmr#NASDAQ">PLMR</a>) and <strong>ProAssurance Corporation </strong>(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pra#NYSE">PRA</a>). Each stock presently sports a Zacks Rank&nbsp;#1 (Strong Buy).</p>
<p>RLI Corporation&#39;s earnings surpassed estimates in three of the last four quarters while missing in one, the average beat being 132.39%. Year to date, shares of RLI have gained 8.2%.</p>
<p>The Zacks Consensus Estimate for RLI&#39;s 2024 and 2025 earnings implies 18.2% and 4.1% year-over-year growth, respectively.</p>
<p>Palomar&#39;s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 15.10%. Year to date, PLMR&#39;s stock has surged 65.8%.</p>
<p>The Zacks Consensus Estimate for PLMR&#39;s 2024 and 2025 earnings indicates 26.3% and 18.5% year-over-year growth, respectively.</p>
<p>ProAssurance earnings surpassed estimates in two of the last four quarters and missed in the other two. Year to date, PRA&#39;s stock has lost 12.4%.</p>
<p>The Zacks Consensus Estimate for PRA&#39;s 2024 and 2025 earnings implies 371.4% and 72.6% year-over-year growth, respectively.</p>
<p><a href="https://www.zacks.com/stock/news/2305535/here-s-why-wait-see-style-is-apt-for-first-american-faf?cid=CS-BENZ-FT-analyst_blog|rank_focused-2305535">To read this article on Zacks.com click here.</a></p>


Here's Why Wait & See Style Is Apt for First American

WIIM

GPMT

LPRO

SLQT

SUNS

UPST

VCTR

Shares of companies within the broader financial sector are trading higher following recent CPI data.

<p>Barclays  analyst Terry Ma   maintains First American Financial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) with a Equal-Weight and lowers the price target from $65 to $61.</p>


Barclays Maintains Equal-Weight on First American Financial, Lowers Price Target to $61

<p><strong>First American Financial's</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) short percent of float has fallen 13.87% since its last report. The company recently reported that it has <strong>1.18 million shares sold short</strong>, which is 1.18% of all regular shares that are available for trading. Based on its trading volume, <strong>it would take traders 2.27 days to cover their short positions on average.</strong></p>
<h3>Why Short Interest Matters</h3>
<p>Short interest is the number of shares that have been sold short but have not yet been covered or closed out. <a href="https://www.benzinga.com/money/how-to-short-a-stock/">Short selling</a> is when a trader sells shares of a company they do not own, with the hope that the price will fall. Traders make money from short selling if the price of the stock falls and they lose if it rises.</p>
<p>Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish.</p>
<p><strong>See Also:</strong> <a href="https://www.benzinga.com/short-interest"><strong>List of the most shorted stocks</strong></a></p>
<h3>First American Financial Short Interest Graph (3 Months)</h3>
<p><img src="https://www.benzinga.com/files/images/story/2024/1719952221_0.png" alt="short_fig" /></p>
<p>As you can see from the chart above the percentage of shares that are sold short for First American Financial has declined since its last report. This does not mean that the stock is going to rise in the near-term but traders should be aware that less shares are being shorted.</p>
<h3>Comparing First American Financial's Short Interest Against Its Peers</h3>
<p>Peer comparison is a popular technique amongst analysts and investors for gauging how well a company is performing. A company's peer is another company that has similar characteristics to it, such as industry, size, age, and financial structure. You can find a company's peer group by reading its 10-K, proxy filing, or by doing your own similarity analysis.</p>
<p>According to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, First American Financial's peer group average for short interest as a percentage of float is 2.25%, which means the company has <strong>less</strong> short interest than most of its peers.</p>
<p>Did you know that increasing short interest can actually be <strong>bullish</strong> for a stock? <a href="https://www.benzinga.com/money/how-to-make-money-on-a-short-squeeze/"><strong>This post by Benzinga Money explains how you can profit from it.</strong></a></p>
<p><em>This article was generated by Benzinga's automated content engine and was reviewed by an editor.</em></p>


<p>Analysts' ratings for First American Financial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) over the last quarter vary from bullish to bearish, as provided by 4 analysts.</p>
<p>Summarizing their recent assessments, the table below illustrates the evolving sentiments in the past 30 days and compares them to the preceding months.</p>
<table>
<thead>
<tr>
<th></th>
<th style="text-align: right;"><strong>Bullish</strong></th>
<th style="text-align: right;"><strong>Somewhat Bullish</strong></th>
<th style="text-align: right;"><strong>Indifferent</strong></th>
<th style="text-align: right;"><strong>Somewhat Bearish</strong></th>
<th style="text-align: right;"><strong>Bearish</strong></th>
</tr>
</thead>
<tbody>
<tr>
<td><strong>Total Ratings</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">4</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>Last 30D</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">1</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>1M Ago</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>2M Ago</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
<tr>
<td><strong>3M Ago</strong></td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">3</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
<td style="text-align: right;">0</td>
</tr>
</tbody>
</table>
<p>In the assessment of 12-month price targets, analysts unveil insights for First American Financial, presenting an average target of $66.75, a high estimate of $72.00, and a low estimate of $63.00. Observing a downward trend, the current average is 5.65% lower than the prior average price target of $70.75. </p>
<p><img src="https://www.benzinga.com/files/images/story/2024/1719921644_0.png" alt="price target chart" /></p>
<h2>Decoding Analyst Ratings: A Detailed Look</h2>
<p>A clear picture of First American Financial's perception among financial experts is painted with a thorough analysis of recent analyst actions. The summary below outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.</p>
<table>
<thead>
<tr>
<th>Analyst</th>
<th>Analyst Firm</th>
<th>Action Taken</th>
<th>Rating</th>
<th>Current Price Target</th>
<th>Prior Price Target</th>
</tr>
</thead>
<tbody>
<tr>
<td>Bose George</td>
<td>Keefe, Bruyette &amp; Woods</td>
<td>Lowers</td>
<td>Outperform</td>
<td>$63.00</td>
<td>$67.00</td>
</tr>
<tr>
<td>John Campbell</td>
<td>Stephens &amp; Co.</td>
<td>Lowers</td>
<td>Overweight</td>
<td>$66.00</td>
<td>$72.00</td>
</tr>
<tr>
<td>John Campbell</td>
<td>Stephens &amp; Co.</td>
<td>Lowers</td>
<td>Overweight</td>
<td>$66.00</td>
<td>$72.00</td>
</tr>
<tr>
<td>John Campbell</td>
<td>Stephens &amp; Co.</td>
<td>Maintains</td>
<td>Overweight</td>
<td>$72.00</td>
<td>$72.00</td>
</tr>
</tbody>
</table>
<h3>Key Insights:</h3>
<ul>
<li><strong>Action Taken:</strong> Analysts adapt their recommendations to changing market conditions and company performance. Whether they 'Maintain', 'Raise' or 'Lower' their stance, it reflects their response to recent developments related to First American Financial. This information provides a snapshot of how analysts perceive the current state of the company.</li>
<li><strong>Rating:</strong> Analysts unravel qualitative evaluations for stocks, ranging from 'Outperform' to 'Underperform'. These ratings offer insights into expectations for the relative performance of First American Financial compared to the broader market.</li>
<li><strong>Price Targets:</strong> Understanding forecasts, analysts offer estimates for First American Financial's future value. Examining the current and prior targets provides insight into analysts' changing expectations.</li>
</ul>
<p>Assessing these analyst evaluations alongside crucial financial indicators can provide a comprehensive overview of First American Financial's market position. Stay informed and make well-judged decisions with the assistance of our Ratings Table.</p>
<p><a href="https://www.benzinga.com/quote/FAF/analyst-ratings?utm_source=Benzinga Insights"><strong>Stay up to date on First American Financial analyst ratings.</strong></a></p>
<h2>Delving into First American Financial's Background</h2>
<p>First American Financial Corp is a financial services business providing insurance through two segments: title insurance and related services and Home warranty. Title insurance and related services include real estate insurance, property closing services, third-party handling of real estate funds (escrow), risk mitigation, real estate data products, and related real estate transaction services. The home warranty segment provides residential service contracts that cover residential systems, such as heating and air conditioning systems, and certain appliances against failures that occur as the result of normal usage during the coverage period. Nearly all the company's revenue comes from the title insurance and related services segment in the United States.</p>
<h3>Financial Milestones: First American Financial's Journey</h3>
<p><strong>Market Capitalization:</strong> With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.</p>
<p><strong>Decline in Revenue:</strong> Over the 3 months period, First American Financial faced challenges, resulting in a decline of approximately <strong>-1.49%</strong> in revenue growth as of 31 March, 2024. This signifies a reduction in the company's top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Financials sector.</p>
<p><strong>Net Margin:</strong> First American Financial's net margin is below industry standards, pointing towards difficulties in achieving strong profitability. With a net margin of <strong>3.28%,</strong> the company may encounter challenges in effective cost control.</p>
<p><strong>Return on Equity (ROE):</strong> First American Financial's ROE falls below industry averages, indicating challenges in efficiently using equity capital. With an ROE of <strong>0.97%,</strong> the company may face hurdles in generating optimal returns for shareholders.</p>
<p><strong>Return on Assets (ROA):</strong> First American Financial's ROA falls below industry averages, indicating challenges in efficiently utilizing assets. With an ROA of <strong>0.3%,</strong> the company may face hurdles in generating optimal returns from its assets.</p>
<p><strong>Debt Management:</strong> The company faces challenges in debt management with a debt-to-equity ratio higher than the industry average. With a ratio of <strong>0.48</strong>, caution is advised due to increased financial risk.</p>
<h2>Understanding the Relevance of Analyst Ratings</h2>
<p>Analysts are specialists within banking and financial systems that typically report for specific stocks or within defined sectors. These people research company financial statements, sit in conference calls and meetings, and speak with relevant insiders to determine what are known as analyst ratings for stocks. Typically, analysts will rate each stock once a quarter. </p>
<p>Some analysts publish their predictions for metrics such as growth estimates, earnings, and revenue to provide additional guidance with their ratings. When using analyst ratings, it is important to keep in mind that stock and sector analysts are also human and are only offering their opinions to investors.</p>
<p>This article was generated by Benzinga's automated content engine and reviewed by an editor.</p>


Unveiling 4 Analyst Insights On First American Financial

<p>Keefe, Bruyette &amp; Woods  analyst Bose George   maintains First American Financial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) with a Outperform and lowers the price target from $67 to $63.</p>


Keefe, Bruyette & Woods Maintains Outperform on First American Financial, Lowers Price Target to $63

<p>The law firm of Federman &amp; Sherwood has initiated an investigation into First American Financial Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>) with respect to their recent data breach. On December 18, 2023, First American Financial Corporation identified unauthorized activity on certain of its information technology systems. Upon detection of the unauthorized activity, First American Financial Corporation took steps to contain, assess, and remediate the incident, including isolating its systems from the Internet. First American Financial Corporation also launched an investigation to determine the nature and scope of the incident, worked with law enforcement, notified certain regulatory authorities, and eradicated the actor from its network. The investigation determined the following personal information for accessed: individuals name, Social Security number, address, driver's license number, financial information, and medical information.</p>


Federman & Sherwood Has Initiated An Investigation Into First American Financial With Respect To Their Recent Data Breach; On December 18, 2023, First American Financial Identified Unauthorized Activity On Certain Of Its Information Technology Systems

<p>Hedge funds made strategic adjustments to their portfolios throughout <a href="https://www.benzinga.com/general/hedge-funds">the first quarter of 2024</a>.</p>
<p>Firms are looking for high-return opportunities beyond the <a href="https://www.benzinga.com/topic/magnificent-seven">mega-cap tech giants</a> preferring to focus on cyclical sectors and artificial intelligence (AI)-related infrastructure stocks.</p>
<p>Except for <strong>Apple Inc</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), positions in several &#8216;Magnificent Seven&#8217; stocks — <strong>Alphabet Inc</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>), <strong>Amazon.com Inc</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>),<strong> Nvidia Corp</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), <strong>Microsoft Corp</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NYSE">MSFT</a>), and <strong>Meta</strong> <strong>Platforms Inc</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>) — were trimmed from hedge funds.</p>
<p>Still, the strong performance of the so-called &#8216;Magnificent 7&#8242; tech stocks maintained their weight at 13% of hedge fund long portfolios, according to the latest Goldman Sachs&#8217; Hedge Fund Monitor report.</p>
<h3 class="wp-block-heading">Cyclical Sectors</h3>
<p>In parallel, hedge funds expanded their investments in cyclical sectors, elevating the exposure to Financials.</p>
<p>Information Technology remained the largest net sector weight at the start of Q2 2024. It accounts for 18% of total net exposure. However, it also registered the largest underweight relative to the Russell 3000, with a -913 basis points (bp) difference. Health Care was the largest overweight sector, with a +375 bp difference.</p>
<p><figure class="wp-block-table is-style-stripes"><br />
<table>
<thead>
<tr>
<th>Sector</th>
<th>Hedge Funds&#8217; <br />Net Weight</th>
<th>Russell 3000 Weight</th>
<th>Hedge Fund Net Tilt</th>
</tr>
</thead>
<tbody>
<tr>
<td>Health Care</td>
<td>15.8%</td>
<td>12.0%</td>
<td>+375 bp</td>
</tr>
<tr>
<td>Communication Services</td>
<td>11.0%</td>
<td>8.8%</td>
<td>+226 bp</td>
</tr>
<tr>
<td>Industrials</td>
<td>12.1%</td>
<td>9.9%</td>
<td>+222 bp</td>
</tr>
<tr>
<td>Materials</td>
<td>4.8%</td>
<td>2.7%</td>
<td>+205 bp</td>
</tr>
<tr>
<td>Energy</td>
<td>4.9%</td>
<td>3.8%</td>
<td>+109 bp</td>
</tr>
<tr>
<td>Consumer Discretionary</td>
<td>11.9%</td>
<td>10.8%</td>
<td>+107 bp</td>
</tr>
<tr>
<td>Utilities</td>
<td>2.8%</td>
<td>2.1%</td>
<td>+76 bp</td>
</tr>
<tr>
<td>Financials</td>
<td>13.3%</td>
<td>14.2%</td>
<td>-98 bp</td>
</tr>
<tr>
<td>Real Estate</td>
<td>1.5%</td>
<td>2.6%</td>
<td>-114 bp</td>
</tr>
<tr>
<td>Consumer Staples</td>
<td>4.0%</td>
<td>6.0%</td>
<td>-196 bp</td>
</tr>
<tr>
<td>Information Technology</td>
<td>17.9%</td>
<td>27.0%</td>
<td>-913 bp</td>
</tr>
<tr>
<td><strong>Total</strong></td>
<td><strong>100.0%</strong></td>
<td><strong>100.0%</strong></td>
<td><strong>0 bp</strong></td>
</tr>
</tbody>
</table>
<p></p></figure></p>
<p>There was also a notable rotation towards utilities, reflecting a <a href="https://www.benzinga.com/topic/artificial-intelligence">broader AI investment focus</a>. </p>
<p>In particular, hedge funds have shown a keen interest in Phase 2 Infrastructure stocks within the AI sector. Among the companies that have seen the largest increase in hedge fund popularity, are:</p>
<ul>
<li><strong>Marvell Technology Inc.</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MRVL#NASDAQ">MRVL</a>)</li>
<li><strong>TD Synnex Corporation</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SNX#NYSE">SNX</a>)</li>
<li><strong>AES Corporation</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AES#NYSE">AES</a>)</li>
<li><strong>Littelfuse</strong> <strong>Inc.</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LFUS#NASDAQ">LFUS</a>) </li>
</ul>
<p><em>See Also</em>: <em><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/05/38927907/ai-driven-rally-set-to-expand-to-power-commodities-utilities-its-not-just-about-nvi">AI-Driven Rally Set To Expand To Power, Commodities, Utilities: &#8216;It&#8217;s Not Just About Nvidia Anymore&#8217;</a></em></p>
<h3 class="wp-block-heading">Most Popular Hedge Funds&#8217; Increase In AI Universe During Q1 2024</h3>
<p><figure class="wp-block-table is-style-stripes"><br />
<table>
<tbody>
<tr>
<td><strong>Name</strong></td>
<td><strong>Subsector</strong></td>
</tr>
<tr>
<td><strong>Marvell Technology, Inc.</strong></td>
<td>Semiconductors</td>
</tr>
<tr>
<td><strong>TD SYNNEX Corporation</strong></td>
<td>Technology Distributors</td>
</tr>
<tr>
<td><strong>Apple Inc.</strong></td>
<td>Technology Hardware Storage &amp; Peripherals</td>
</tr>
<tr>
<td><strong>AES Corporation</strong></td>
<td>Independent Power Producers &amp; Energy Traders</td>
</tr>
<tr>
<td><strong>Littelfuse, Inc.</strong></td>
<td>Electronic Components</td>
</tr>
<tr>
<td><strong>Adobe Inc.</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ADBE#NASDAQ">ADBE</a>)</td>
<td>Application Software</td>
</tr>
<tr>
<td><strong>Freeport-McMoRan, Inc.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FCX#NYSE">FCX</a>) </td>
<td>Copper</td>
</tr>
<tr>
<td><strong>Walgreens Boots Alliance, Inc.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WBA#NYSE">WBA</a>)</td>
<td>Drug Retail</td>
</tr>
<tr>
<td><strong>Nextracker Inc. Class A</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NXT#NASDAQ">NXT</a>)</td>
<td>Electrical Components &amp; Equipment</td>
</tr>
<tr>
<td><strong>First American Financial Corporation</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FAF#NYSE">FAF</a>)</td>
<td>Property &amp; Casualty Insurance</td>
</tr>
</tbody>
</table>
<p></p></figure></p>
<h3 class="wp-block-heading">Most Concentrated Hedge Fund Holdings In The S&amp;P 500</h3>
<p>The Goldman Sachs&#8217; Hedge Fund Monitor asserts that portfolio concentration among hedge funds remains particularly elevated. </p>
<p>The typical hedge fund maintains 70% of its long portfolio in the top 10 positions. This trend remained extremely elevated in Q1 2024.</p>
<p>The following table details the top 20 most concentrated hedge fund holdings within the S&amp;P 500, highlighting where hedge funds are investing their capital.</p>
<p><figure class="wp-block-table is-style-stripes"><br />
<table>
<thead>
<tr>
<th>Company</th>
<th>Sector</th>
<th>Sub-sector</th>
<th>% of Equity Cap Owned by Hedge Funds</th>
</tr>
</thead>
<tbody>
<tr>
<td><strong>Bath &amp; Body Works</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BBWI#NYSE">BBWI</a>)</td>
<td>Consumer Discretionary</td>
<td>Other Specialty Retail</td>
<td>27%</td>
</tr>
<tr>
<td><strong>Hess Corp.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HES#NYSE">HES</a>)</td>
<td>Energy</td>
<td>Oil &amp; Gas Exploration &amp; Production</td>
<td>16%</td>
</tr>
<tr>
<td><strong>Ralph Lauren Corp.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RL#NYSE">RL</a>)</td>
<td>Consumer Discretionary</td>
<td>Apparel Accessories &amp; Luxury Goods</td>
<td>15%</td>
</tr>
<tr>
<td><strong>Expedia Group Inc.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EXPE#NYSE">EXPE</a>)</td>
<td>Consumer Discretionary</td>
<td>Hotels, Resorts &amp; Cruise Lines</td>
<td>14%</td>
</tr>
<tr>
<td><strong>Universal Health Svc.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UHS#NYSE">UHS</a>)</td>
<td>Health Care</td>
<td>Health Care Facilities</td>
<td>14%</td>
</tr>
<tr>
<td><strong>Western Digital</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/WDC#NASDAQ">WDC</a>)</td>
<td>Information Technology</td>
<td>Technology Hardware, Storage &amp; Peripherals</td>
<td>13%</td>
</tr>
<tr>
<td><strong>NRG Energy Inc.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NRG#NYSE">NRG</a>)</td>
<td>Utilities</td>
<td>Electric Utilities</td>
<td>13%</td>
</tr>
<tr>
<td><strong>Invesco Ltd.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVZ#NYSE">IVZ</a>)</td>
<td>Financials</td>
<td>Asset Management &amp; Custody Banks</td>
<td>13%</td>
</tr>
<tr>
<td><strong>Vistra Corp.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VST#NYSE">VST</a>)</td>
<td>Utilities</td>
<td>Independent Power Producers &amp; Energy Traders</td>
<td>13%</td>
</tr>
<tr>
<td><strong>Caesars Entertainment </strong>(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CZR#NYSE">CZR</a>)</td>
<td>Consumer Discretionary</td>
<td>Casinos &amp; Gaming</td>
<td>12%</td>
</tr>
<tr>
<td><strong>Evergy Inc</strong>. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EVRG#NASDAQ">EVRG</a>)</td>
<td>Utilities</td>
<td>Electric Utilities</td>
<td>12%</td>
</tr>
<tr>
<td><strong>Catalent Inc.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CTLT#NYSE">CTLT</a>)</td>
<td>Health Care</td>
<td>Pharmaceuticals</td>
<td>11%</td>
</tr>
<tr>
<td><strong>Juniper Networks</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JNPR#NYSE">JNPR</a>)</td>
<td>Information Technology</td>
<td>Communications Equipment</td>
<td>11%</td>
</tr>
<tr>
<td><strong>Dollar Tree Inc.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DLTR#NYSE">DLTR</a>)</td>
<td>Consumer Staples</td>
<td>Consumer Staples Merchandise Retail</td>
<td>11%</td>
</tr>
<tr>
<td><strong>NiSource Inc.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NI#NYSE">NI</a>)</td>
<td>Utilities</td>
<td>Multi-Utilities</td>
<td>10%</td>
</tr>
<tr>
<td><strong>Incyte Corp.</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/INCY#NASDAQ">INCY</a>)</td>
<td>Health Care</td>
<td>Biotechnology</td>
<td>10%</td>
</tr>
<tr>
<td><strong>Lamb Weston Holdings </strong>(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LW#NYSE">LW</a>)</td>
<td>Consumer Staples</td>
<td>Packaged Foods &amp; Meats</td>
<td>10%</td>
</tr>
<tr>
<td><strong>Qorvo Inc.</strong> (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QRVO#NASDAQ">QRVO</a>)</td>
<td>Information Technology</td>
<td>Semiconductors</td>
<td>10%</td>
</tr>
<tr>
<td><strong>Synchrony Financial</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SYF#NYSE">SYF</a>)</td>
<td>Financials</td>
<td>Consumer Finance</td>
<td>10%</td>
</tr>
<tr>
<td><strong>Humana Inc.</strong> (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HUM#NYSE">HUM</a>)</td>
<td>Health Care</td>
<td>Managed Health Care</td>
<td>10%</td>
</tr>
</tbody>
</table>
<p></p></figure></p>
<p><em>Now Read</em>: <em><a href="https://www.benzinga.com/markets/cryptocurrency/24/05/38991084/inflation-stresses-retail-traders-as-fed-cuts-look-unlikely-crypto-doubts-increase-survey">Inflation Stresses Retail Traders As Fed Cuts Look Unlikely, Crypto Doubts Increase: Survey</a></em></p>
<p><em>Image: Shutterstock</em></p>


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Press Releases

First American Title Co-President Sally French Tyler Selected for 2024 HousingWire Vanguard Award

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Dallas-Plano-Irving Home Prices Up 2.3% Year Over Year in August, According to First American Data & Analytics Monthly Home Price Index Report

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