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Keefe Bruyette downgrades PennyMac Mortgage on book value drop

Keefe Bruyette downgraded PennyMac Mortgage (PMT) to Market Perform from Outperform with a price target of $13.50, down from $14.50. The firm reduced estimates post the Q2 report, now seeing the company’s earnings per share moving in line with the 40c dividend by the second half of 2027 versus prior expectations for the end of 2026. Keefe cites PennyMac’s book value decline in Q2 and the slower timeline to reaching a double-digit return on equity for the downgrade. It sees limited near-term catalysts for the shares.

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