Piper Jaffray Cuts Price Target on Ocwen Financial (OCN) to $2; Remains Sidelined

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."

For an analyst ratings summary and ratings history on Ocwen Financial Corp click here. For more ratings news on Ocwen Financial Corp click here.

Shares of Ocwen Financial Corp closed at $2.23 yesterday.

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