BTIG analyst Eric Hagen has maintained their neutral stance on LDI stock, giving a Hold rating yesterday.
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Eric Hagen’s rating is based on a combination of factors that reflect the current and potential market conditions for loanDepot. The recent surge in loanDepot’s stock price appears to be driven by speculation around potential policy changes, such as a possible declaration of a “housing emergency” by Trump, which could lead to lower mortgage rates and improved affordability for homeowners. However, despite this optimism, the actual reduction in mortgage rates may be limited unless significant changes occur in the broader interest rate environment, such as the 10-year Treasury note dropping below 4%.
Additionally, while the gain on sale margins for originators like loanDepot are currently low, the valuations of mortgage servicing rights (MSRs) are at peak levels, which could stabilize margins if mortgage rates fall to around 6%. The company’s valuation remains neutral as it works towards achieving profitability, and more stable earnings are observed in larger scale stocks. These factors contribute to the Hold rating, indicating a cautious approach given the uncertainties in the market and the company’s current financial position.
In another report released yesterday, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $4.50 price target.
LDI’s price has also changed dramatically for the past six months – from $1.700 to $3.510, which is a 106.47% increase.