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FICO multiple compression on FHFA comments a buying opportunity, says BofA

BofA analyst Joshua Dennerlein notes FICO (FICO) shares have fallen 20% since news broke about comments that Federal Housing Finance Agency director Bill Pulte made at a Mortgage Bankers Association conference as the market did not expect a focus from the current FHFA director on fees related to homeownership. However, the firm’s take is that this presents a sentiment headwind and multiple compression in the near term, but “does not fundamentally change” the medium-to-long-term story for FICO. The firm, which adds that FICO historically has leaned into share selloffs by ramping up buybacks, reiterates a Buy rating, calls the pullback one that “offers an enhanced buying opportunity” and notes that FICO remains on the firm’s “US1 list” of best ideas.

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