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Investing.com - Keefe, Bruyette & Woods raised its price target on PennyMac Financial (NYSE:PFSI) to $138.00 from $129.00 on Friday, while maintaining a Market Perform rating on the stock.
The research firm increased its earnings per share estimates for 2025, 2026, and 2027 to $11.95, $15.24, and $17.47, respectively, up from previous forecasts of $10.90, $14.38, and $16.98. This adjustment follows improved operating return on equity guidance from the company. The stock currently trades at a P/E ratio of 13.9x, which InvestingPro analysis suggests is low relative to its near-term earnings growth potential.
The updated estimates reflect projected operating ROEs of 17.8% for Q4 2025, 17.3% for 2026, and 16.3% for 2027, which fall at the low end of PennyMac’s guidance range of "high teens to low twenties."
PennyMac Financial shares rose 7% on Thursday and currently trade at approximately 1.6 times third-quarter tangible book value.
The new $138 price target represents roughly 1.7 times the estimated third-quarter tangible book value of approximately $81, according to KBW’s analysis.
In other recent news, PennyMac Financial Services Inc. reported its Q3 2025 earnings, which exceeded analysts’ expectations. The company achieved an earnings per share (EPS) of $3.37, surpassing the forecasted $2.74. Additionally, PennyMac’s revenue reached $632.9 million, outperforming the anticipated $592.53 million. These results highlight the company’s strong financial performance in the recent quarter. The earnings announcement is a significant development for investors, reflecting PennyMac’s operational efficiency. While the stock price showed resilience, analysts continue to monitor the company’s financial health closely. The recent earnings beat underscores PennyMac’s ability to navigate market challenges effectively.
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