Mortgage banks facing challenging environment - Credit Suisse

Mr Cooper

22/08/2022 12:34

** Credit Suisse says the environment remains challenging
for mortgage banks as origination revenue continues to decline 
    ** Cuts PT on Finance of America  FOA.N , Home Point Capital
Inc  HMPT.O , loanDepot  LDI.N , PennyMac Mortgage Investment
Trust  PMT.N  and Redwood Trust Inc  RWT.N 
    ** Also lowers FY22 and FY23 EPS estimates to reflect
continued pressure on origination volumes and margins 
    ** "With the revenue environment remaining challenging, the
focus remains on the ability to remove costs in order to
maintain/return to profitability," says CS 
    ** Brokerage chooses RWT, Rithm Capital Corp  RITM.N , Mr.
Cooper Group Inc  COOP.O  and PennyMac Financial Services
 PFSI.N  as top picks in the sector 
    ** Shares in FOA and LDI down ~61% and 65.42% YTD, up to
last close; HMPT, PMT and RWT have shed between 12.12% and
37.68% YTD
     
 Company               New PT      Old PT       Median PT
                                                (Refinitiv)
 Finance of America    $4          $5           $3.25
 Home Point Capital    $4          $4.50        $3.50
 Inc                                            
 loanDepot Inc         $3.25       $4.25        $2.13
 PennyMac Mortgage     $16         $16.50       $17
 Investment Trust                               
 Redwood Trust Inc     $10.50      $11          $10.75
 

 (Reporting by Manya Saini in Bengaluru)
 ((Manya.Saini@thomsonreuters.com;))