Velocity Financial (VEL) PT Raised to $23 at BTIG

BTIG analyst Sarah Barcomb raised the price target on Velocity Financial (NYSE: VEL) to $23.00 (from $20.00) while maintaining a Buy rating.

The analyst comments "Bottom Line: We're raising our price target another 15%, to $23 from $20, reflecting 10% additional earnings growth next year (to $3/share from our previous $2.75, vs. ~$2/share for FY24), and for now just 5% valuation upside, although we think even tighter CMBS spreads could support faster deal activity and enhanced earnings visibility, and a higher and more sustainable valuation premium... The stock valuation has remained especially stable against this recent move up in rates, unlike the majority of resi and commercial lenders whose read-thru for forward loan production may be more sensitive to current conditions. We see VEL's valuation already incorporating expectations for earnings and portfolio growth, and therefore we see at least some risk if the delinquency pipeline grows further from here at the same time we think faster resolution times for existing inventory creating a source of upside in a scenario where home prices strengthen much further."

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