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Investing.com - Wells Fargo has assumed coverage on PennyMac Mortgage Investment Trust (NYSE:PMT) with an Equal Weight rating and a price target of $13.00 on Monday. The stock currently offers a substantial 12.94% dividend yield and has maintained dividend payments for 16 consecutive years, according to InvestingPro data.
The firm cited PMT’s investment platform and experienced senior management as positive factors, but noted concerns about current run-rate earnings falling below the dividend level.
Wells Fargo pointed to high short-term interest rates driving up interest expenses for the mortgage investment trust, suggesting the dividend could be at risk without improved run-rate earnings.
The $13 price target represents approximately 0.9 times price-to-book value multiple on PMT’s second-quarter book value of $15.00, according to Wells Fargo’s analysis.
The firm expects PMT stock to continue trading at a discount to book value, reflecting the uncertain rate and economic environment as well as the earnings run-rate being below the dividend.
In other recent news, PennyMac Mortgage Investment Trust reported a net loss of $3 million for the second quarter of 2025, resulting in a loss per share of $0.04. This was a notable miss compared to the anticipated earnings per share of $0.36, reflecting a shortfall of 111.11%. Despite this earnings miss, PennyMac maintained its dividend payout at $0.40 per share, demonstrating a commitment to shareholder returns even amid a challenging interest rate environment. The company’s stock price showed some resilience, although specific price movements are not the focus here. These developments highlight the financial pressures the company faces in the current economic climate. While no mergers or acquisitions were reported, the earnings miss is a significant point of interest for investors. Analysts and investors will likely continue to monitor PennyMac’s financial strategies and market conditions closely.
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