Bank of America Securities analyst Mihir Bhatia maintained a Buy rating on Essent Group (ESNT – Research Report) on May 9 and set a price target of $65.00.
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Mihir Bhatia has given his Buy rating due to a combination of factors that highlight Essent Group’s strong financial performance and strategic positioning. The company’s first-quarter earnings per share exceeded consensus estimates, indicating robust profitability despite being slightly below Bhatia’s forecast. Revenue and new insurance written surpassed expectations, and the company’s loss ratio remains low at 12%, reflecting a stable credit environment. Additionally, Essent Group’s book value has grown significantly year-over-year, and the company’s expense management and favorable tax rate further enhance its competitive edge in the mortgage insurance market.
Bhatia also points out the solid top-line performance driven by strong new insurance written and high persistency rates, which contributed to an increase in insurance in force. Essent Group’s strategic decision to increase ceding to its Bermuda subsidiary is expected to improve tax efficiency. Despite some concerns over higher credit provisions and lower title premiums, the overall outlook remains positive, supported by favorable housing credit trends and demographic factors. As a result, Bhatia maintains a price objective of $65 for Essent Group, reflecting confidence in the company’s future growth potential.
According to TipRanks, Bhatia is a 4-star analyst with an average return of 8.2% and a 60.61% success rate. Bhatia covers the Financial sector, focusing on stocks such as Synchrony Financial, American Express, and Capital One Financial.