PennyMac Financial price target raised to $125 from $112 at Piper Sandler

Piper Sandler analyst Kevin Barker raised the firm’s price target on PennyMac Financial to $125 from $112 and keeps an Overweight rating on the shares. The increase in multiple is driven by higher peer multiples and more confidence in the outlook given the recent mortgage rate rally, the firm says. Piper is also increasing its Q3 operating EPS to $2.87 from $2.85 as it takes into account higher origination volume given PennyMac’s intra-quarter update, partially offset by lower consumer direct gain on sale margins. In addition, the firm is decreasing its Q3 GAAP EPS to $1.90 from $2.85 as it takes into account the MSR marks.