FBR Capital Remains Bullish on Bofl Holding (BOFI) After Traveling with Management
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FBR Capital reiterated an Outperform rating and $33.00 price target on BofI Holding (NASDAQ: BOFI) after traveling with company management. BOFI reiterated its expectation for 20%-plus loan growth. The outlook in its largest business, non-QM jumbo resi mortgage, remains strong, but investors focused on its multifamily, equipment leasing, and lender finance businesses. Also, Legal momentum is moving in the right direction according to the company, and a year and a half into this process there have been no significant issues with regulators, auditors, or performance.
Analyst Bob Ramsey commented, "We reiterate our Outperform on BofI Holding and our $33 price target, equal to 13.2x our FY(Jun)18 operating EPS estimate following recent travels with BOFI's CFO. Our sense from client meetings was that investors wanted a brief update on the legal front but are increasingly focused on BOFI's fundamentals. For good reason, too, given 38% YOY EPS growth last year, a 1.7% ROAA, and 21% ROTCE. Trading at 9.1x our FY(Jun)18 EPS estimate, we consider the shares very attractive given BOFI's robust growth, best-in-class profitability, and strong credit. We reiterate our respective FY(Jun)17 and FY(Jun)18 EPS estimates of $2.10 and $2.50. BOFI is an FBR Alpha Generator pick."
Shares of BofI Holding closed at $22.39 yesterday.
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