FBR Capital Reiterates an 'Outperform' on PHH Corporation (PHH); Valuation Too Compelling to Ignore;

FBR Capital reiterates an 'Outperform' on PHH Corporation (NYSE: PHH), PT $28.

FBR analyst says, "We reiterate our rating and our price target on PHH heading into 1Q11 earnings. We believe that the fundamental operations at PHH remain strong, and the company continues to grow market share. Although the 10-year Treasury yields increased 17 bps from about 3.3% to about 3.47% in the first quarter, the 30-year fixed-rate mortgage rates remained stable at 4.86%. We estimate that PHH will not adjust its MSR valuations given relatively stable primary rates and yield curve. We believe that this is a positive, as a stable MSR asset, coupled with strong core earnings, should support a higher valuation. We estimate that PHH will earn $0.56 on a core operating basis and $0.51 on a GAAP basis."

For more ratings news on PHH Corporation click here and for the rating history of PHH Corporation click here.

Shares of PHH Corporation closed at $21.77 yesterday.

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