Brokerage expects mortgage finance sector's Q3 to be riddled with macro fears
03/10/2022 12:07
** Piper Sandler expects Q3 reports of mortgage finance
firms to focus on the cost of funds and financing, loan demand,
and credit quality against the backdrop of intensifying market
volatility
** "Recession fears are front and center with global growth
concerns, inflation, and rate volatility impacting all corners
of the market" - Brokerage
** Slashes price targets on multiple cos in the sector under
its coverage; Chooses specialty finance co TriplePoint Venture
Growth BDC TPVG.N and Arbor Realty Trust ABR.N as its top
picks
** Says venture debt lender TPVG is likely to benefit from
asset sensitivity with primarily fixed liabilities, as well as
its portfolio momentum
** Sees Arbor Realty in the current environment as a
potential "safe haven" due to co's diversified model
** As of last close, shares in TPVG and ABR down ~39.5% and
~37.2% respectively YTD
Company Rating New PT Old PT
Arbor Realty Trust ABR.N Overweight $16.50 $18.50
Broadmark Realty Capital Underweight $5.50 $7
Inc BRMK.N
Ellington Residential Overweight $8 $9.50
Mortgage REIT EARN.N
TriplePoint Venture Growth Overweight $14.50 $16
BDC TPVG.N
Hercules Capital Inc Neutral $13 $16
HTGC.N
Ellington Financial Inc Overweight $15 $17.50
EFC.N
(Reporting by Manya Saini in Bengaluru)
((Manya.Saini@thomsonreuters.com;))