Piper Jaffray Downgrades Ocwen Financial Corp (OCN) to Underweight
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Piper Jaffray downgraded Ocwen Financial Corp (NYSE: OCN) from Neutral to Underweight and maintained a price target of $2, saying they see no end in sight to the tangible book value burn.
Analyst Kevin Barker commented, "After trading as low as $1.50 per share, OCN has since recovered to over $4.00 per share, or roughly 80% of tangible book value despite burning $2.83 of book value over the past three quarters. Considering we expect OCN to continue burning TBV through 2017 and our view that book value will drop well below $4.00 per share, we believe the risk of owning shares at current levels with the hope the company will earn money one day is high. Ultimately, it comes down to whether OCN can earn money in the future. We do not see how this is the case with the servicing portfolio in run-off and HAMP expiring at the end of 2016."
Shares of Ocwen Financial Corp closed at $4.06 yesterday.
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