BTIG affirms MGIC Investment (NYSE: MTG) with a Buy rating and $12 price target following strong Q2 results reported earlier today.

Analyst Mark Palmer commented today, While a wholesale revival of MGIC Investment Corporation’s (MTG) stock price is likely to require some follow-through from the U.S. government in its promises to cede a much more significant portion of the mortgage insurance space to private insurers, the much-stronger-than-expected 2Q16 results that the company reported this morning should serve as a reminder to investors of the company’s potential, particularly in light of its discount valuation.

On the Buy rating, Palmer commented, While persistent buzz about a potential FHA mortgage insurance rate cut may serve as a near-term headwind to the stock, we believe MTG’s 2Q16 performance demonstrated that it remains a solid franchise and that its stock represents an interesting source of optionality.

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