First American Financial Corporation (NYSE:FAF) Given Average Recommendation of "Moderate Buy" by Brokerages

Key Points

• Analyst sentiment is moderately bullish: Seven of eight analysts rate First American Financial a “buy,” while one recommends holding the stock. The average 12-month price target is $84.60, above the reported $78.16 share price.
• Quarterly results exceeded expectations: The company reported earnings of $2.08 per share versus the $1.80 consensus estimate, while revenue rose 15% year over year to $2.11 billion.
• Institutional ownership remains high, but insiders sold shares: Institutions own 89.05% of the stock, while two executives recently reduced their holdings; insiders collectively own 3.50%. The company also pays a quarterly dividend of $0.55, equivalent to a 2.8% annual yield.

First American Financial Corporation (NYSE:FAF - Get Free Report) has earned an average recommendation of "Moderate Buy" from the eight analysts that are presently covering the company, MarketBeat reports. One equities research analyst has rated the stock with a hold recommendation and seven have issued a buy recommendation on the company. The average 1 year price objective among analysts that have covered the stock in the last year is $84.60.

Several equities research analysts have issued reports on FAF shares. Wall Street Zen downgraded First American Financial from a "buy" rating to a "hold" rating in a research report on Saturday, May 2nd. Stephens reiterated an "overweight" rating and issued a $84.00 price target on shares of First American Financial in a research report on Friday, June 12th. Barclays boosted their price objective on First American Financial from $80.00 to $83.00 and gave the company an "overweight" rating in a research note on Tuesday, July 7th. Truist Financial lifted their target price on First American Financial from $82.00 to $85.00 and gave the company a "buy" rating in a report on Friday, April 24th. Finally, Benchmark assumed coverage on shares of First American Financial in a report on Tuesday, July 21st. They issued a "buy" rating and a $85.00 price target on the stock.

Insiders Place Their Bets

In related news, SVP Lisa W. Cornehl sold 5,823 shares of the stock in a transaction on Tuesday, May 5th. The stock was sold at an average price of $68.63, for a total value of $399,632.49. Following the sale, the senior vice president owned 29,635 shares in the company, valued at approximately $2,033,850.05. This trade represents a 16.42% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, CAO Steven A. Adams sold 3,253 shares of First American Financial stock in a transaction on Friday, July 24th. The shares were sold at an average price of $74.99, for a total value of $243,942.47. Following the sale, the chief accounting officer directly owned 10,234 shares of the company's stock, valued at $767,447.66. This represents a 24.12% decrease in their position. The disclosure for this sale is available in the SEC filing. 3.50% of the stock is owned by insiders.

Hedge Funds Weigh In On First American Financial

Institutional investors have recently added to or reduced their stakes in the business. Handelsbanken Fonder AB boosted its position in shares of First American Financial by 7.6% during the 2nd quarter. Handelsbanken Fonder AB now owns 26,960 shares of the insurance provider's stock valued at $1,849,000 after acquiring an additional 1,900 shares during the last quarter. Reinhart Partners LLC. increased its position in shares of First American Financial by 1.9% in the second quarter. Reinhart Partners LLC. now owns 1,553,234 shares of the insurance provider's stock worth $106,537,000 after purchasing an additional 28,534 shares during the last quarter. Assenagon Asset Management S.A. bought a new position in shares of First American Financial in the second quarter worth approximately $16,714,000. GAMMA Investing LLC raised its stake in First American Financial by 9.6% in the second quarter. GAMMA Investing LLC now owns 1,696 shares of the insurance provider's stock valued at $116,000 after purchasing an additional 148 shares in the last quarter. Finally, Versant Capital Management Inc lifted its position in First American Financial by 12.0% during the second quarter. Versant Capital Management Inc now owns 5,294 shares of the insurance provider's stock valued at $363,000 after purchasing an additional 566 shares during the last quarter. 89.05% of the stock is currently owned by institutional investors.

First American Financial Stock Down 1.3%

NYSE FAF opened at $78.16 on Thursday. The company's 50 day moving average is $68.98 and its 200-day moving average is $66.35. First American Financial has a 12-month low of $56.20 and a 12-month high of $79.87. The firm has a market cap of $7.98 billion, a P/E ratio of 10.83, a price-to-earnings-growth ratio of 0.74 and a beta of 1.23.

First American Financial (NYSE:FAF - Get Free Report) last released its quarterly earnings data on Wednesday, July 22nd. The insurance provider reported $2.08 EPS for the quarter, topping the consensus estimate of $1.80 by $0.28. First American Financial had a net margin of 9.33% and a return on equity of 13.31%. The company had revenue of $2.11 billion during the quarter, compared to the consensus estimate of $2.03 billion. During the same period last year, the firm earned $1.53 EPS. First American Financial's revenue for the quarter was up 15.0% on a year-over-year basis. Equities analysts expect that First American Financial will post 7.02 EPS for the current year.

First American Financial Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Monday, June 15th. Shareholders of record on Monday, June 8th were issued a $0.55 dividend. This represents a $2.20 annualized dividend and a yield of 2.8%. The ex-dividend date of this dividend was Monday, June 8th. First American Financial's dividend payout ratio (DPR) is presently 30.47%.

First American Financial Company Profile

First American Financial Corporation is a leading provider of title insurance, settlement services and diversified real estate-related data and analytics. Headquartered in Santa Ana, California, the company serves customers throughout the United States as well as in Canada, Europe, Latin America and Asia. Its business is built on the underwriting capabilities of its title insurance operations combined with comprehensive closing and escrow services for homebuyers, sellers, mortgage lenders and real estate professionals.

The company's title insurance segment issues policies that protect property owners and mortgage lenders against defects in titles, liens or encumbrances that can arise during real property transactions.

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