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On Monday, Keefe, Bruyette & Woods (KBW) updated their financial outlook for Fidelity National (NYSE:FNF), raising the price target from $63.00 to $65.00 while maintaining a Market Perform rating on the company’s stock. The adjustment reflects an increase in the firm’s earnings per share (EPS) estimates for the years 2025, 2026, and 2027, citing higher anticipated pre-tax title margins.
KBW analyst Bose George noted the revised EPS forecasts are now set at $5.85 for 2025, $6.67 for 2026, and $7.36 for 2027, up from previous estimates of $5.50, $6.46, and $7.23, respectively. This change is based on the incorporation of a higher run-rate pre-tax title margin into their forward estimates. The new price target of $65 is derived using an 11x multiple on 2027 estimated title earnings and a 7.5x multiple on 2027 estimated FG earnings, both discounted back one year at a 10% rate. InvestingPro reveals that FNF has maintained dividend payments for 21 consecutive years and currently offers a 3.36% dividend yield, demonstrating consistent shareholder returns.
The updated estimates follow a margin of 15.1% for the year 2024, with KBW now modeling margins to increase to 15.3% in 2025, 16.2% in 2026, and 16.9% in 2027. Despite the upward revision in price target and EPS estimates, KBW has decided to maintain its Market Perform rating for Fidelity National shares.
George explained that while the firm remains positive on the longer-term prospects of the business, it sees limited near-term catalysts for the stock, outside of potentially stronger commercial results. The analyst also pointed out that with mortgage rates still hovering near 7%, immediate triggers for stock movement appear to be constrained.
In other recent news, Fidelity National Financial Inc. reported strong Q4 2024 earnings, surpassing expectations with an EPS of $1.34 against a forecast of $1.21 and revenues of $3.62 billion compared to an anticipated $3.32 billion. The company highlighted significant growth in its title segment, with adjusted pre-tax earnings rising to $343 million from $198 million the previous year. Additionally, Fidelity National’s subsidiary, F&G, contributed 38% of consolidated adjusted net earnings, up from 22% in 2022, and paid $108 million in dividends. Stephens analysts responded positively by raising the company’s price target from $68 to $75, maintaining an Overweight rating due to the strong quarterly performance. The analysts cited the company’s impressive title segment performance, marked by a 480 basis point expansion in the Title Pretax margin. Fidelity National also announced a $25 million share buyback authorization, with the Board approving the resumption of buyback activities. Looking ahead, the company projects quarterly interest and investment income between $95 million and $100 million, alongside over $100 million in annual dividend income from the F&G segment.
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