Piper Jaffray Cuts Price Target on Ocwen Financial (OCN) to $2; Remains Sidelined
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Piper Jaffray reiterates Neutral rating on Ocwen Financial Corp (NYSE: OCN), and cut the price target to $2.00 (from $2.50), following the company's 2Q earnings report. OCN reported operating EPS of (~$0.39), compared to ($0.43) estimate. The operating beat was driven by a higher revenue from Streamlined HAMP and other initiatives.
Analyst Kevin Barker commented, "We reiterate our Neutral rating and lower our price target to $2.00 from $2.50 following the 2Q16 earnings. OCN reported a ($0.71) loss this quarter. We estimate the operating EPS was closer to a ($0.39) loss after taking into: (1) $30M from the Fisher settlements; (2) $15M regulatory reserve related to recent discussions with the California DBO; (3) $11M negative FV marks on MSRs; and (4) $13M of FV adjustments to the New Residential liability. The ($0.39) loss compares to ($0.43) estimate. The operating result was slightly better than our estimate primarily due to higher revenue from Streamlined HAMP (~$0.11 per share) and other initiatives (~$0.15 per share). Considering the loss this quarter, the risk of additional litigation/regulatory expenses and our view that TBV will be below $4.00 within the next year, we are lowering our price target to $2.00."
Shares of Ocwen Financial Corp closed at $2.23 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
Related EntitiesPiper Jaffray, Earnings
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