MGIC Investment (MTG – Research Report), the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Eric Hagen from BTIG remains neutral on the stock and has a $20.00 price target.
Eric Hagen’s Buy rating on MGIC Investment (MTG) is primarily based on a variety of factors, such as the company’s strong third-quarter results and its ongoing share buyback program. The company’s adjusted EPS exceeded both BTIG’s and the consensus estimates, indicating a robust financial performance. Furthermore, the net loss ratio for the quarter was remarkably low, mainly due to a re-estimation of reserves incurred during the Covid period. This, coupled with a steady delinquency rate, reflects the healthy results anticipated amid slow prepayment speeds and stable back book margins.
Despite the potential risk of a weaker employment outlook impacting the company’s valuation, Hagen remains positive about MTG’s prospects. The company’s Insurance-in-Force (IIF) saw a slight increase, and it also repurchased four million shares in the third quarter at an average price of $16.99/share, demonstrating a strong commitment to return capital to shareholders. Hagen believes that MTG’s current valuation does not adequately represent the potential for these accretive buybacks to continue into the next year. Lastly, the analyst praises MTG’s performance on both an absolute and relative basis compared to other Mortgage Insurers (MIs) and mortgage finance stocks broadly, further supporting the Buy rating.
MTG’s price has also changed moderately for the past six months – from $14.920 to $16.920, which is a 13.40% increase.
See the top stocks recommended by analysts >>
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
MGIC Investment (MTG) Company Description:
MGIC Investment Corp. is a private mortgage insurer that serves lenders throughout the United States, and Puerto Rico. It also provides lenders with underwriting and other services and products related to home mortgage lending through its subsidiaries, such as Mortgage Guaranty Insurance Corp. and MGIC Indemnity Corp. The company was founded by Max Karl in 1957 and is headquartered in Milwaukee, WI.
Read More on MTG:
