Keefe, Bruyette & Woods Forecasts Strong Price Appreciation for First American Financial (NYSE:FAF) Stock

Key Points

• Keefe, Bruyette & Woods has raised the price target for First American Financial from $77.00 to $79.00, indicating a potential upside of 30.71% from the last closing price.
• First American Financial reported $1.53 earnings per share for the last quarter, exceeding analysts' expectations and marking a 14.2% year-over-year revenue growth.
• The company has initiated a $300 million stock buyback program, reflecting confidence in its undervalued stock.

First American Financial (NYSE:FAF - Free Report) had its price objective lifted by Keefe, Bruyette & Woods from $77.00 to $79.00 in a research note issued to investors on Monday,Benzinga reports. They currently have an outperform rating on the insurance provider's stock.

Other equities analysts also recently issued reports about the company. Barclays dropped their price target on First American Financial from $72.00 to $70.00 and set an "equal weight" rating on the stock in a research note on Tuesday, July 8th. Wall Street Zen lowered First American Financial from a "buy" rating to a "hold" rating in a research note on Saturday, July 12th. Two research analysts have rated the stock with a hold rating and three have assigned a buy rating to the company. According to data from MarketBeat, the company has a consensus rating of "Moderate Buy" and a consensus price target of $75.00.

First American Financial Stock Down 0.5%

FAF traded down $0.33 during mid-day trading on Monday, reaching $59.93. 300,668 shares of the company traded hands, compared to its average volume of 925,565. The stock has a market capitalization of $6.10 billion, a P/E ratio of 33.10 and a beta of 1.24. First American Financial has a 52-week low of $53.09 and a 52-week high of $70.92. The company's fifty day moving average price is $58.18 and its 200-day moving average price is $60.94.

First American Financial (NYSE:FAF - Get Free Report) last released its quarterly earnings results on Wednesday, July 23rd. The insurance provider reported $1.53 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.40 by $0.13. The firm had revenue of $1.84 billion for the quarter, compared to the consensus estimate of $1.78 billion. First American Financial had a return on equity of 10.41% and a net margin of 2.90%. The company's revenue for the quarter was up 14.2% on a year-over-year basis. During the same period last year, the business posted $1.27 EPS. As a group, sell-side analysts forecast that First American Financial will post 5.35 earnings per share for the current fiscal year.

First American Financial declared that its board has authorized a share repurchase plan on Wednesday, July 23rd that permits the company to buyback $300.00 million in outstanding shares. This buyback authorization permits the insurance provider to buy up to 5.1% of its stock through open market purchases. Stock buyback plans are often an indication that the company's board believes its shares are undervalued.

First American Financial Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Monday, June 16th. Investors of record on Monday, June 9th were paid a dividend of $0.54 per share. The ex-dividend date was Monday, June 9th. This represents a $2.16 dividend on an annualized basis and a dividend yield of 3.6%. First American Financial's payout ratio is 119.34%.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of the company. Adams Wealth Management lifted its stake in shares of First American Financial by 1.9% during the 1st quarter. Adams Wealth Management now owns 10,983 shares of the insurance provider's stock valued at $721,000 after buying an additional 207 shares in the last quarter. CacheTech Inc. lifted its stake in shares of First American Financial by 1.9% during the 1st quarter. CacheTech Inc. now owns 10,983 shares of the insurance provider's stock valued at $721,000 after buying an additional 207 shares in the last quarter. American Century Companies Inc. lifted its stake in shares of First American Financial by 0.5% during the 1st quarter. American Century Companies Inc. now owns 43,006 shares of the insurance provider's stock valued at $2,823,000 after buying an additional 229 shares in the last quarter. Nomura Asset Management Co. Ltd. lifted its stake in shares of First American Financial by 18.0% during the 4th quarter. Nomura Asset Management Co. Ltd. now owns 1,510 shares of the insurance provider's stock valued at $94,000 after buying an additional 230 shares in the last quarter. Finally, The Manufacturers Life Insurance Company grew its stake in First American Financial by 0.3% during the fourth quarter. The Manufacturers Life Insurance Company now owns 84,344 shares of the insurance provider's stock valued at $5,266,000 after acquiring an additional 230 shares in the last quarter. Hedge funds and other institutional investors own 89.05% of the company's stock.

First American Financial Company Profile

First American Financial Corporation, through its subsidiaries, provides financial services. It operates through Title Insurance and Services, and Home Warranty segments. The Title Insurance and Services segment issues title insurance policies on residential and commercial property, as well as offers related products and services internationally.