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UPDATE: BofA Securities Downgrades Enact Holdings Inc (ACT) to Underperform

August 18, 2022 5:57 AM EDT
Get Alerts ACT Hot Sheet
Price: $24.81 +0.04%

Rating Summary:
    13 Buy, 5 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 18 | Down: 24 | New: 19
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(Updated - August 18, 2022 8:44 AM EDT)

BofA Securities analyst Mihir Bhatia downgraded Enact Holdings Inc (NASDAQ: ACT) from Neutral to Underperform with a price target of $25.00.

The analyst commented, "Year-to-date, all mortgage insurers have outperformed the S&P 500 (-10.3%), with ACT (+33.8%) leading the pack. Following the move, however, ACT’s valuation is at a premium to peers. ACT now trades at an 8x PE multiple to consensus 2023e EPS, a premium to other MIs trading closer to 7x. On a P/B (price/book) basis, ACT is now trading close to 1.1x P/B, a premium to MTG/RDN trading closer to BV (book value, see Exhibit 3). We continue to view the business model favorably, but we view valuation as extended. Our $25 PO, based on a 7.5x multiple to 2023e EPS, implies 11% downside and warrants an Underperform rating, in our view. We note that ACT pays a $0.14/share quarterly dividend and is likely to also announce a special dividend in 2H22."

For an analyst ratings summary and ratings history on Enact Holdings Inc click here. For more ratings news on Enact Holdings Inc click here.

Shares of Enact Holdings Inc closed at $27.66 yesterday.


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