Close

Compass Point Downgrades MGIC Investment (MTG) to Neutral

April 20, 2016 7:42 AM EDT
Get Alerts MTG Hot Sheet
Price: $22.32 +0.86%

Rating Summary:
    11 Buy, 5 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 11
Join SI Premium – FREE

Compass Point downgraded MGIC Investment (NYSE: MTG) from Buy to Neutral with a price target of $9.00 (from $10.00).

Analyst Amy DeBone commented, "We downgrade shares of MTG from Buy to Neutral, reduce our price target to $9 from $10, reduce our 2016 estimate to $0.78 from $0.95, and reduce our 2017 estimate to $0.95 from $1.04. MTG's 1Q16 operating results were weaker-than-expected, and our revised earnings estimates reflect higher incurred losses, slightly lower premiums, and higher operating expenses. Incurred drive the miss to our estimates, and did not reflect the improving credit trends revealed in the monthly performance metrics, in our view. We have adjusted our incurred loss forecast to reflect a higher average reserve per late-stage default and higher average paid claim. Our NIW estimates reflect a 5% YoY decline in NIW in 2016 and a 3% decrease in 2017. Despite the large capital cushion under PMIERs, the $16M quarterly dividend from MGIC to the holdco is expected to remain stable for the time being, therefore, our estimates do not reflect additional repurchases of the outstanding converts. Our $9 price target represents multiple of 9.5x our revised 2017 EPS estimate, and 1.3x BVPS of $6.88."

For an analyst ratings summary and ratings history on MGIC Investment click here. For more ratings news on MGIC Investment click here.

Shares of MGIC Investment closed at $7.11 yesterday.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change, Downgrades

Related Entities

Earnings