First American Financial (NYSE:FAF) Shares Down 5% - Should You Sell?

Key Points

• FAF shares fell 5% to about $72.69 in mid-day trading, near the stock’s 50-day moving average, with trading volume below its average.
• Analyst sentiment remains positive overall: seven analysts rate the stock a Buy, one rates it Hold, and the consensus target price is $84.60. However, Zacks Research recently downgraded the shares from Strong Buy to Hold.
• First American reported stronger-than-expected quarterly results, with EPS of $2.08 versus the $1.80 estimate and revenue up 15% year over year to $2.11 billion. Institutional investors own 89.05% of the stock, while an executive recently sold 3,253 shares.

First American Financial Corporation (NYSE:FAF - Get Free Report) shares were down 5% during mid-day trading on Friday . The stock traded as low as $72.40 and last traded at $72.6910. 652,575 shares were traded during mid-day trading, a decline of 32% from the average session volume of 953,786 shares. The stock had previously closed at $76.51.

Analyst Upgrades and Downgrades

Several brokerages recently commented on FAF. Barclays raised their target price on First American Financial from $80.00 to $83.00 and gave the stock an "overweight" rating in a research report on Tuesday, July 7th. Weiss Ratings reissued a "buy (b)" rating on shares of First American Financial in a report on Monday, July 20th. Keefe, Bruyette & Woods upped their price objective on shares of First American Financial from $84.00 to $86.00 and gave the company an "outperform" rating in a research note on Friday, July 24th. Benchmark assumed coverage on shares of First American Financial in a research report on Tuesday, July 21st. They set a "buy" rating and a $85.00 target price for the company. Finally, Zacks Research cut First American Financial from a "strong-buy" rating to a "hold" rating in a research note on Tuesday, June 23rd. Seven analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the company. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus target price of $84.60.

First American Financial Stock Down 5.0%

The stock's 50 day moving average is $72.59 and its 200-day moving average is $68.20. The company has a market cap of $7.42 billion, a PE ratio of 10.09, a P/E/G ratio of 0.68 and a beta of 1.21.

First American Financial (NYSE:FAF - Get Free Report) last posted its earnings results on Wednesday, July 22nd. The insurance provider reported $2.08 earnings per share (EPS) for the quarter, beating 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 firm had revenue of $2.11 billion during the quarter, compared to analysts' expectations of $2.03 billion. During the same period in the previous year, the business posted $1.53 EPS. The business's revenue was up 15.0% compared to the same quarter last year. On average, analysts anticipate that First American Financial Corporation will post 7.11 EPS for the current fiscal year.

Insider Buying and Selling

In related news, CAO Steven Adams sold 3,253 shares of the firm's stock in a transaction that occurred on Friday, July 24th. The stock was sold at an average price of $74.99, for a total value of $243,942.47. Following the completion of the transaction, the chief accounting officer directly owned 10,234 shares of the company's stock, valued at $767,447.66. This trade represents a 24.12% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Company insiders own 3.50% of the company's stock.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in FAF. GAMMA Investing LLC raised its stake in shares of First American Financial by 9.6% during 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. Equitable Trust Co. grew its stake in First American Financial by 2.3% during the first quarter. Equitable Trust Co. now owns 6,980 shares of the insurance provider's stock worth $421,000 after buying an additional 160 shares during the last quarter. Naples Global Advisors LLC lifted its position in First American Financial by 2.4% during the 4th quarter. Naples Global Advisors LLC now owns 7,500 shares of the insurance provider's stock valued at $461,000 after purchasing an additional 175 shares during the period. Danske Bank A S increased its position in shares of First American Financial by 28.6% in the 4th quarter. Danske Bank A S now owns 900 shares of the insurance provider's stock valued at $55,000 after buying an additional 200 shares in the last quarter. Finally, Quarry LP boosted its stake in shares of First American Financial by 14.0% during the 4th quarter. Quarry LP now owns 1,658 shares of the insurance provider's stock worth $102,000 after buying an additional 203 shares during the last quarter. 89.05% of the stock is currently owned by institutional investors.

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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