PennyMac Financial price target raised to $115 from $105 at BTIG

BTIG analyst Eric Hagen raised the firm’s price target on PennyMac Financial to $115 from $105 and keeps a Buy rating on the shares. The firm notes that the valuation is sitting near an all-time high, but says “it could still be a good entry point if we run forward tangible book value to about $75+ by year-end, with some upside if volatility comes down to support more stable hedging for the MSR.” BTIG remains mostly drawn to the durable earnings profile targeting a mid-teens ROE if mortgage rates move in either direction from here, which could support valuation upside as earnings quality improves from unlocking opex efficiencies, while other tangible benefits of scale also manifest in the form of tighter and less volatile credit spreads for unsecured bondholders.