Wall Street Zen Upgrades First American Financial (NYSE:FAF) to Buy

Key Points

• First American Financial has been upgraded to a "buy" rating by Wall Street Zen, reflecting a positive outlook for the company's stock.
• The company's recent quarterly earnings showed a 14.2% increase in revenue compared to the same quarter last year, alongside an EPS of $1.53, exceeding expectations.
• A stock buyback program has been approved, allowing First American Financial to repurchase up to $300 million in shares, indicating management's belief that the stock is undervalued.

First American Financial (NYSE:FAF - Get Free Report) was upgraded by analysts at Wall Street Zen from a "hold" rating to a "buy" rating in a note issued to investors on Saturday.

A number of other equities research analysts have also weighed in on FAF. Barclays lowered their target price on shares of First American Financial from $72.00 to $70.00 and set an "equal weight" rating on the stock in a report on Tuesday, July 8th. Keefe, Bruyette & Woods raised their price target on shares of First American Financial from $77.00 to $79.00 and gave the company an "outperform" rating in a report on Monday, July 28th. One investment analyst has rated the stock with a hold rating and four have issued a buy rating to the stock. According to MarketBeat, the stock has an average rating of "Moderate Buy" and a consensus target price of $75.00.

First American Financial Price Performance

FAF traded up $1.36 during trading on Friday, hitting $64.43. The stock had a trading volume of 319,674 shares, compared to its average volume of 910,712. The company has a 50 day moving average price of $59.36 and a 200-day moving average price of $60.98. The firm has a market cap of $6.56 billion, a price-to-earnings ratio of 35.60 and a beta of 1.24. First American Financial has a one year low of $53.09 and a one year high of $70.92.

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

First American Financial announced that its board has approved a stock buyback plan on Wednesday, July 23rd that allows the company to buyback $300.00 million in shares. This buyback authorization allows the insurance provider to buy up to 5.1% of its shares through open market purchases. Shares buyback plans are generally a sign that the company's leadership believes its shares are undervalued.

Institutional Investors Weigh In On First American Financial

Several hedge funds and other institutional investors have recently made changes to their positions in FAF. Alpine Bank Wealth Management purchased a new position in First American Financial in the 1st quarter worth approximately $28,000. Atlantic Union Bankshares Corp bought a new stake in First American Financial in the 2nd quarter worth approximately $36,000. Richardson Capital Management LLC purchased a new stake in First American Financial during the 1st quarter valued at $39,000. Ameritas Advisory Services LLC purchased a new stake in First American Financial during the 2nd quarter valued at $48,000. Finally, Versant Capital Management Inc raised its holdings in First American Financial by 645.7% during the 1st quarter. Versant Capital Management Inc now owns 962 shares of the insurance provider's stock valued at $63,000 after buying an additional 833 shares during the period. Hedge funds and other institutional investors own 89.05% of the company's stock.

About First American Financial

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.