Citi analyst Arren Cyganovich reiterated a Buy rating on NMI Holdings (NMIH – Research Report) yesterday and set a price target of $35.00.
Arren Cyganovich has given his Buy rating due to a combination of factors that suggest NMI Holdings has a positive trajectory. The company benefits from the current high mortgage rate environment, which contributes to elevated loan persistency and an increased need for down payment assistance. This has led to substantial insurance-in-force growth for NMIH, despite a decrease in new insurance written compared to previous years. Moreover, NMIH’s focus on writing higher credit quality private mortgage insurance positions it favorably, as credit trends might deteriorate, yet NMIH is expected to outperform its peers.
Additionally, NMI Holdings’ recent financial results have surpassed expectations, with fourth-quarter adjusted earnings per share coming in above both Citi’s and the consensus estimates. This outperformance was largely due to lower claim expenses. While operating expenses were higher, other financial metrics, including net investment income and net earned premiums, aligned closely with projections. Based on these results and a modestly improved outlook on premium yield, Cyganovich has maintained a target price of $35, expecting the company’s earnings per share to increase over the next few years. The disciplined underwriting standards and pricing seen across the private mortgage insurance market further support the optimism for NMI Holdings’ future performance.
Cyganovich covers the Financial sector, focusing on stocks such as Discover Financial Services, SLM, and American Express. According to TipRanks, Cyganovich has an average return of 17.5% and a 69.03% success rate on recommended stocks.
In another report released yesterday, Barclays also assigned a Buy rating to the stock with a $40.00 price target.
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NMI Holdings (NMIH) Company Description:
NMI Holdings, Inc. is engaged in the provision of private mortgage guaranty insurance. It focuses on long-term customer relationships, disciplined and proactive risk selection and pricing, fair and transparent claims payment practices, responsive customer service, financial strength, and profitability. The company was founded on May 19, 2011 and is headquartered in Emeryville, CA.
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