Wall Street Zen Downgrades PennyMac Financial Services (NYSE:PFSI) to Sell

Key Points

• PennyMac Financial Services has been downgraded from a "hold" to a "sell" rating by Wall Street Zen, indicating a shift in analyst sentiment towards the stock.
• UBS Group and Piper Sandler also adjusted their price targets downward, highlighting varying degrees of caution across several brokerages, with a new average price target of $119.33.
• The company's quarterly earnings report showed a significant miss in both earnings per share and revenue expectations, emphasizing ongoing challenges in the current market environment.

Wall Street Zen cut shares of PennyMac Financial Services (NYSE:PFSI - Free Report) from a hold rating to a sell rating in a report released on Sunday.

Other research analysts have also recently issued research reports about the company. Wells Fargo & Company initiated coverage on PennyMac Financial Services in a research note on Monday, August 25th. They set an "overweight" rating and a $115.00 target price on the stock. Keefe, Bruyette & Woods upped their target price on PennyMac Financial Services from $117.00 to $121.00 and gave the stock an "outperform" rating in a report on Wednesday, September 3rd. Barclays decreased their price objective on PennyMac Financial Services from $124.00 to $119.00 and set an "overweight" rating for the company in a report on Tuesday, July 8th. Piper Sandler reduced their target price on PennyMac Financial Services from $125.00 to $121.00 and set an "overweight" rating for the company in a research note on Wednesday, July 23rd. Finally, UBS Group reduced their target price on PennyMac Financial Services from $115.00 to $110.00 and set a "neutral" rating for the company in a research note on Thursday, July 24th. Five equities research analysts have rated the stock with a Buy rating and one has given a Hold rating to the company's stock. Based on data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus price target of $119.33.

PennyMac Financial Services Stock Performance

Shares of PFSI traded up $0.26 during trading hours on Friday, hitting $122.06. The stock had a trading volume of 61,612 shares, compared to its average volume of 385,818. The company has a debt-to-equity ratio of 3.03, a current ratio of 0.34 and a quick ratio of 0.34. PennyMac Financial Services has a 12 month low of $85.74 and a 12 month high of $130.02. The firm has a market capitalization of $6.31 billion, a PE ratio of 16.93 and a beta of 1.51. The stock has a fifty day moving average price of $107.66 and a 200 day moving average price of $101.18.

PennyMac Financial Services (NYSE:PFSI - Get Free Report) last released its earnings results on Tuesday, July 22nd. The real estate investment trust reported $1.02 earnings per share for the quarter, missing the consensus estimate of $3.01 by ($1.99). PennyMac Financial Services had a net margin of 22.00% and a return on equity of 12.18%. The company had revenue of $444.73 million for the quarter, compared to analysts' expectations of $547.44 million. During the same quarter last year, the firm posted $1.85 earnings per share. PennyMac Financial Services's revenue for the quarter was up 9.5% on a year-over-year basis. Analysts anticipate that PennyMac Financial Services will post 13.77 EPS for the current year.

PennyMac Financial Services Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Friday, August 22nd. Stockholders of record on Wednesday, August 13th were issued a dividend of $0.30 per share. The ex-dividend date was Wednesday, August 13th. This represents a $1.20 dividend on an annualized basis and a dividend yield of 1.0%. PennyMac Financial Services's payout ratio is currently 16.64%.

Insider Buying and Selling at PennyMac Financial Services

In other PennyMac Financial Services news, insider Derek Stark sold 4,750 shares of the firm's stock in a transaction dated Monday, August 25th. The shares were sold at an average price of $109.56, for a total value of $520,410.00. Following the completion of the sale, the insider owned 20,621 shares in the company, valued at approximately $2,259,236.76. This trade represents a 18.72% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, CEO David Spector sold 5,000 shares of the firm's stock in a transaction dated Monday, August 18th. The shares were sold at an average price of $105.73, for a total transaction of $528,650.00. Following the completion of the transaction, the chief executive officer directly owned 130,604 shares in the company, valued at $13,808,760.92. This trade represents a 3.69% decrease in their position. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 30,632 shares of company stock worth $3,295,916. Company insiders own 15.80% of the company's stock.

Hedge Funds Weigh In On PennyMac Financial Services

Institutional investors and hedge funds have recently modified their holdings of the stock. Orbis Allan Gray Ltd increased its position in PennyMac Financial Services by 447.5% during the 1st quarter. Orbis Allan Gray Ltd now owns 926,775 shares of the real estate investment trust's stock valued at $92,779,000 after purchasing an additional 757,489 shares during the period. Norges Bank purchased a new stake in PennyMac Financial Services in the 2nd quarter worth about $39,976,000. Goldentree Asset Management LP purchased a new position in PennyMac Financial Services during the 2nd quarter valued at about $29,249,000. Millennium Management LLC grew its holdings in PennyMac Financial Services by 48.8% during the 1st quarter. Millennium Management LLC now owns 771,605 shares of the real estate investment trust's stock valued at $77,245,000 after buying an additional 253,031 shares in the last quarter. Finally, Philadelphia Financial Management of San Francisco LLC bought a new stake in shares of PennyMac Financial Services during the 1st quarter valued at about $18,701,000. 57.87% of the stock is currently owned by institutional investors and hedge funds.

PennyMac Financial Services Company Profile

PennyMac Financial Services, Inc, through its subsidiaries, engages in the mortgage banking and investment management activities in the United States. The company operates through three segments: Production, Servicing, and Investment Management. The Production segment is involved in the origination, acquisition, and sale of loans.