PennyMac Mortgage upgraded to Outperform from Market Perform at Keefe Bruyette

Keefe Bruyette upgraded PennyMac Mortgage to Outperform from Market Perform with a price target of $15.50, up from $15. The analyst believes the interest rate outlook is a positive for the sector as mortgage spreads should continue to get support. Further, residential credit should remain strong, supported by relatively steady home prices and a soft landing in the economy, the analyst tells investors in a research note. Amid this backdrop Keefe remains positive on the agency mortgage backed security real estate investment trusts and several hybrid REITs. It upgraded PennyMac Mortgage as part of its Q2 preview.