Progressive shares fall as Q3 earnings, revenue miss expectations
Investing.com - Keefe, Bruyette & Woods raised its price target on PennyMac Financial (NYSE:PFSI) to $121.00 from $117.00 on Wednesday, while maintaining an Outperform rating on the stock.
The investment firm cited a more constructive outlook following recent meetings with PennyMac Financial’s management team. KBW has increased its earnings estimates for the company across multiple fiscal years.
The updated forecasts show expected earnings of $11.01 for fiscal year 2025, $14.38 for 2026, and $16.98 for fiscal year 2027, representing increases from previous estimates of $10.82, $13.78, and $15.76 respectively.
KBW now projects operating return on equity (ROE) of 15.1% and 15.4% in the third and fourth quarters of 2025, up from previous estimates of 14.8% and 14.7%. The firm’s longer-term ROE projections for fiscal years 2026 and 2027 have been revised upward to 16.1% and 16.5% from 15.5% for both years. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report.
PennyMac Financial shares have gained approximately 10% since the end of the second quarter and are currently trading at 1.4 times second-quarter book value, according to KBW’s analysis. The stock has shown strong momentum, with InvestingPro data indicating impressive returns over both the last month and quarter.
In other recent news, PennyMac Financial Services has announced the pricing of a $650 million senior notes offering at an interest rate of 6.750%, with the notes maturing on February 15, 2034. The company plans to use the proceeds to repay borrowings under its secured MSR facilities and other secured indebtedness, as well as for general corporate purposes. In analyst updates, Wells Fargo has assumed coverage of PennyMac Financial with an Overweight rating and a price target of $115. This decision was influenced by PennyMac’s strong franchise and growth opportunities in consumer direct and broker channels. Keefe, Bruyette & Woods (KBW) reiterated its Outperform rating and set a price target of $117 after meetings with PennyMac’s management team. Meanwhile, Piper Sandler has adjusted its price target for PennyMac Financial to $121, down from $125, while maintaining an Overweight rating. This adjustment follows an operating miss in the second quarter of 2025, attributed to lower gain on sale income, despite higher servicing fees.
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