On Aug 18, Zacks Investment Research upgraded PennyMac Financial Services, Inc. (NYSE:PFSI) to a Zacks Rank #1 (Strong Buy).
Improved Profitability Drives Upgrade
The uptick in the rank of this Westlake Village, CA-based mortgage specialist was driven by strong estimate revisions on the back of impressive second-quarter 2016 results.
On Aug 3, PennyMac Financial released its second-quarter 2016 results. The company reported earnings per share of 65 cents that comfortably surpassed the Zacks Consensus Estimate by 8.3%. Also, the bottom line improved year over year. Results benefited from an increase in revenues, partially offset by higher expenses.
Net income attributable to the company’s common stockholders improved 13.5% year over year to $14.5 million.
The performance of the company’s investment management and mortgage servicing segments failed to exhibit growth. However, the mortgage loan production segment recorded strong performance during the second quarter. The production segment’s pretax income was $104.5 million, up 37% year over year.
Notably, the quarter witnessed a rise in net gains on mortgage loans held for sale, mainly driven by strong margins and considerable increases in production and lock volumes in the correspondent as well as consumer direct channel.
As of Jun 30, 2016, total mortgage loans serviced in unpaid principal balance portfolio increased 26.1% from the prior- year quarter to $171.7 billion.
The Zacks Consensus Estimate for 2016 increased 1% to $2.36 per share over the past 30 days. Also, for 2017, it moved north by 2.5% to $2.81 per share.
Other Stocks to Consider
Some top-ranked stocks in the finance space include Enterprise Financial Services Corp. (NASDAQ:EFSC) , Credit Acceptance Corp. (NASDAQ:CACC) and Hancock Holding Company (NASDAQ:HBHC) . All three stocks sport the same Zacks Rank as PennyMac Financial.
ENTERPRISE FINL (EFSC): Free Stock Analysis Report
HANCOCK HLDG CO (HBHC): Free Stock Analysis Report
CREDIT ACCEPT (CACC): Free Stock Analysis Report
PENNYMAC FIN SV (PFSI): Free Stock Analysis Report
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PennyMac Financial Upped To Strong Buy On Impressive Q2
Published 08/17/2016, 09:14 PM
Updated 07/09/2023, 06:31 AM
PennyMac Financial Upped To Strong Buy On Impressive Q2
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