PennyMac Financial Services, Inc. (NYSE:PFSI) Stock Rated "Hold" by Sell-Side Brokerages

Key Points

• Analyst consensus is “Hold”: Two analysts rate PennyMac Financial Services a sell, three recommend holding, and four recommend buying, with an average 12-month price target of $92.14. Several firms recently lowered their price targets, signaling more cautious expectations.
• Third-quarter results missed estimates: Adjusted EPS came in at $1.05 versus the $1.27 consensus, while revenue of $502 million fell 25.9% year over year and missed expectations. Shares opened at $62.93, near their one-year low of $57.52.
• Investors retain income and institutional support: PennyMac declared a quarterly dividend of $0.30 per share, equivalent to a 1.9% annualized yield, while institutional investors and hedge funds own approximately 57.87% of the stock.

PennyMac Financial Services, Inc. (NYSE:PFSI - Get Free Report) has been assigned an average rating of "Hold" from the nine research firms that are covering the company, Marketbeat.com reports. Two investment analysts have rated the stock with a sell recommendation, three have assigned a hold recommendation and four have assigned a buy recommendation to the company. The average twelve-month price objective among brokers that have issued a report on the stock in the last year is $92.14.

Several equities analysts recently issued reports on the company. Barclays lowered their price target on PennyMac Financial Services from $85.00 to $71.00 and set an "equal weight" rating on the stock in a research note on Monday, October 5th. Stephens reduced their price objective on PennyMac Financial Services from $91.00 to $78.00 and set an "equal weight" rating for the company in a research report on Thursday, July 30th. Wall Street Zen cut PennyMac Financial Services from a "hold" rating to a "sell" rating in a research report on Saturday, August 1st. Weiss Ratings lowered PennyMac Financial Services from a "sell (d+)" rating to a "sell (d)" rating in a research note on Thursday. Finally, Wells Fargo & Company cut their target price on PennyMac Financial Services from $95.00 to $85.00 and set an "overweight" rating for the company in a research note on Friday.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. The Manufacturers Life Insurance Company bought a new position in shares of PennyMac Financial Services during the second quarter worth approximately $1,713,000. BlueCrest Capital Management Ltd boosted its stake in shares of PennyMac Financial Services by 12.8% in the second quarter. BlueCrest Capital Management Ltd now owns 396,103 shares of the real estate investment trust's stock valued at $34,501,000 after buying an additional 45,008 shares during the period. Legal & General Group Plc acquired a new stake in PennyMac Financial Services during the second quarter worth approximately $2,250,000. Donald Smith & CO. Inc. acquired a new stake in PennyMac Financial Services during the second quarter worth approximately $163,940,000. Finally, Bank of America Corp DE acquired a new stake in PennyMac Financial Services during the second quarter worth approximately $24,930,000. Institutional investors and hedge funds own 57.87% of the company's stock.

Key PennyMac Financial Services News

Here are the key news stories impacting PennyMac Financial Services this week:

• Positive Sentiment: PennyMac declared a quarterly dividend of $0.30 per share, payable November 27 to shareholders of record as of November 16. The $1.20 annualized payout represents a dividend yield of approximately 1.9%, offering income support for investors.
• Neutral Sentiment: Wells Fargo lowered its price target for PFSI from $95 to $85 but maintained an “overweight” rating. The revised target still implies substantial potential upside from recent levels, while the reduction reflects more cautious near-term expectations. Wells Fargo price target update
• Neutral Sentiment: The company’s earnings release and conference call provided additional detail on third-quarter performance and management commentary. PennyMac third-quarter earnings release PennyMac earnings call transcript
• Negative Sentiment: Third-quarter earnings were weaker than expected. PennyMac reported adjusted earnings of $1.05 per share versus consensus estimates ranging from $1.27 to $1.37, while revenue of $502 million missed the $531.77 million consensus estimate. Revenue declined 25.9% year over year, and earnings dropped sharply from $3.37 per share in the prior-year quarter. The earnings and revenue misses are the primary reasons PFSI shares have decreased. PennyMac third-quarter earnings analysis

PennyMac Financial Services Stock Performance

Shares of NYSE PFSI opened at $62.93 on Friday. The business's 50-day moving average price is $66.01 and its two-hundred day moving average price is $85.02. The company has a debt-to-equity ratio of 3.22, a current ratio of 0.38 and a quick ratio of 0.38. PennyMac Financial Services has a one year low of $57.52 and a one year high of $160.36. The company has a market capitalization of $3.27 billion, a P/E ratio of 14.14 and a beta of 1.45.

PennyMac Financial Services (NYSE:PFSI - Get Free Report) last posted its earnings results on Thursday, October 29th. The real estate investment trust reported $1.05 EPS for the quarter, missing the consensus estimate of $1.27 by ($0.22). The business had revenue of $502.00 million for the quarter, compared to analyst estimates of $531.77 million. PennyMac Financial Services had a return on equity of 8.20% and a net margin of 11.72%. The company's quarterly revenue was down 25.9% compared to the same quarter last year. During the same period in the previous year, the company earned $3.37 earnings per share. Analysts anticipate that PennyMac Financial Services will post 6.78 earnings per share for the current fiscal year.

PennyMac Financial Services Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Friday, November 27th. Shareholders of record on Monday, November 16th will be given a $0.30 dividend. This represents a $1.20 dividend on an annualized basis and a yield of 1.9%. The ex-dividend date is Monday, November 16th. PennyMac Financial Services's dividend payout ratio is 26.97%.

About PennyMac Financial Services

PennyMac Financial Services, Inc NYSE: PFSI is a specialty financial services company focused on the U.S. residential mortgage market. Through its subsidiaries, the company originates, acquires, and services residential mortgage loans, with an emphasis on conventional, government-backed, and other mortgage products.

PennyMac's primary businesses include mortgage production, loan servicing, and investment management. Its production platform acquires and originates loans through correspondent relationships with banks and other lenders, as well as through direct-to-consumer and broker channels.

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