Royal Bank Of Canada Forecasts Strong Price Appreciation for MGIC Investment (NYSE:MTG) Stock

Key Points

• Royal Bank of Canada raised MGIC Investment’s price target from $28 to $32 while maintaining a “sector perform” rating, implying 6.78% upside from the stock’s $29.97 price. Analysts overall give the shares a “Hold” consensus with an average target of $30.60.
• MGIC Investment reported quarterly EPS of $0.87, beating estimates of $0.76, although revenue declined 2.9% year over year to $295.39 million. The company also authorized a $750 million share buyback, covering up to 12.4% of outstanding shares.
• Institutional investors own 95.58% of MGIC Investment, with major holders including AQR Capital Management, Geode Capital and Allianz Asset Management increasing their positions. Shares recently traded down 1.6%, while executives sold stock under pre-arranged trading plans.

MGIC Investment (NYSE:MTG - Get Free Report) had its price objective hoisted by analysts at Royal Bank Of Canada from $28.00 to $32.00 in a note issued to investors on Friday,Benzinga reports. The brokerage currently has a "sector perform" rating on the insurance provider's stock. Royal Bank Of Canada's target price would suggest a potential upside of 6.78% from the company's current price.

Several other research analysts also recently weighed in on MTG. Keefe, Bruyette & Woods upped their price objective on shares of MGIC Investment from $29.00 to $30.00 and gave the stock a "market perform" rating in a report on Friday. Roth Capital restated a "buy" rating and issued a $35.00 target price on shares of MGIC Investment in a report on Thursday. Weiss Ratings raised MGIC Investment from a "buy (b)" rating to a "buy (b+)" rating in a research report on Tuesday, July 7th. Finally, Barclays cut their price objective on shares of MGIC Investment from $29.00 to $28.00 and set an "equal weight" rating for the company in a report on Friday, May 1st. Two analysts have rated the stock with a Buy rating and four have issued a Hold rating to the stock. According to MarketBeat.com, the company currently has an average rating of "Hold" and an average price target of $30.60.

MGIC Investment Trading Down 1.6%

Shares of NYSE:MTG traded down $0.48 during mid-day trading on Friday, hitting $29.97. The company had a trading volume of 901,562 shares, compared to its average volume of 2,056,911. The company has a debt-to-equity ratio of 0.13, a current ratio of 1.14 and a quick ratio of 1.14. MGIC Investment has a one year low of $24.69 and a one year high of $31.89. The firm has a fifty day moving average price of $27.34 and a 200 day moving average price of $26.94. The company has a market capitalization of $6.34 billion, a PE ratio of 9.36, a price-to-earnings-growth ratio of 2.11 and a beta of 0.67.

MGIC Investment (NYSE:MTG - Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The insurance provider reported $0.87 earnings per share for the quarter, beating the consensus estimate of $0.76 by $0.11. MGIC Investment had a net margin of 59.20% and a return on equity of 13.83%. The firm had revenue of $295.39 million during the quarter, compared to the consensus estimate of $297.54 million. During the same period in the previous year, the firm posted $0.82 earnings per share. The business's revenue was down 2.9% compared to the same quarter last year. As a group, research analysts forecast that MGIC Investment will post 3.05 EPS for the current year.

MGIC Investment declared that its board has authorized a share buyback plan on Thursday, April 23rd that authorizes the company to buyback $750.00 million in outstanding shares. This buyback authorization authorizes the insurance provider to purchase up to 12.4% of its shares through open market purchases. Shares buyback plans are generally an indication that the company's leadership believes its shares are undervalued.

Insiders Place Their Bets

In related news, EVP Paula C. Maggio sold 20,937 shares of the company's stock in a transaction on Friday, May 29th. The shares were sold at an average price of $25.55, for a total value of $534,940.35. Following the completion of the transaction, the executive vice president owned 169,620 shares of the company's stock, valued at approximately $4,333,791. This represents a 10.99% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Salvatore A. Miosi sold 30,000 shares of the company's stock in a transaction that occurred on Monday, June 8th. The stock was sold at an average price of $25.38, for a total value of $761,400.00. Following the completion of the transaction, the chief operating officer owned 560,951 shares of the company's stock, valued at $14,236,936.38. The trade was a 5.08% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.34% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of MTG. AQR Capital Management LLC raised its holdings in MGIC Investment by 31.3% in the fourth quarter. AQR Capital Management LLC now owns 11,616,282 shares of the insurance provider's stock worth $339,428,000 after purchasing an additional 2,771,533 shares in the last quarter. Geode Capital Management LLC grew its position in shares of MGIC Investment by 2.8% in the 4th quarter. Geode Capital Management LLC now owns 5,371,470 shares of the insurance provider's stock worth $163,368,000 after buying an additional 146,589 shares during the last quarter. Allianz Asset Management GmbH grew its position in shares of MGIC Investment by 1.0% in the 4th quarter. Allianz Asset Management GmbH now owns 5,010,157 shares of the insurance provider's stock worth $146,397,000 after buying an additional 48,064 shares during the last quarter. First Trust Advisors LP raised its stake in shares of MGIC Investment by 1.7% during the 4th quarter. First Trust Advisors LP now owns 4,609,318 shares of the insurance provider's stock worth $134,684,000 after acquiring an additional 76,306 shares in the last quarter. Finally, Northern Trust Corp lifted its position in MGIC Investment by 10.7% during the third quarter. Northern Trust Corp now owns 4,561,398 shares of the insurance provider's stock valued at $129,407,000 after acquiring an additional 441,809 shares during the last quarter. Institutional investors own 95.58% of the company's stock.

About MGIC Investment

MGIC Investment Corporation NYSE: MTG is a leading provider of private mortgage insurance in the United States. Established in 1957 as the nation's first private mortgage insurer, MGIC helps lenders manage credit risk and facilitates homeownership by protecting mortgage loans against default. Headquartered in Milwaukee, Wisconsin, the company operates through its principal subsidiary, Mortgage Guaranty Insurance Corporation, and maintains relationships with a broad network of originators and servicers nationwide.

The company's primary business activity involves issuing mortgage insurance policies that enable borrowers to purchase homes with down payments below traditional lending thresholds.

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