Analyst cuts MGIC Investment to Market-Perform on valuation concerns

Published 10/12/2024, 13:22
Analyst cuts MGIC Investment to Market-Perform on valuation concerns

On Tuesday, Keefe, Bruyette & Woods adjusted its stance on MGIC Investment (NYSE:MTG), downgrading the stock to Market Perform from Outperform. The firm set a price target of $29.00 for MGIC Investment's shares.

The downgrade was based on valuation concerns, as the analyst believes that other names in the mortgage insurance (MI) sector offer more attractive valuations. According to the analyst's assessment, competitors such as Essent Group Ltd . (NYSE:NYSE:ESNT), Radian Group Inc . (NYSE:NYSE:RDN), and Arch Capital Group Ltd. (NASDAQ:ACGL) are trading closer to 1.05 times tangible book value (TBV), while MGIC is trading closer to 1.2 times TBV.

Despite the downgrade, the analyst's commentary indicated a continued positive outlook on the mortgage insurance sector at large.

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