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

Key Points

• Wall Street Zen downgraded PennyMac Financial Services (NYSE:PFSI) from a "hold" to a "sell" rating.
• Analysts are mixed—six Buy and three Hold ratings yield a MarketBeat consensus of "Moderate Buy" with an average price target of $131.14, even as several firms have trimmed targets recently.
• PennyMac missed its latest quarter (EPS $1.97 vs. $3.23 est.; revenue $538M vs. $639.8M), and the stock trades near $91 with a 12‑month range of $82.65–$160.36, P/E ~9.8 and market cap about $4.77B.

PennyMac Financial Services (NYSE:PFSI - Get Free Report) was downgraded by equities research analysts at Wall Street Zen from a "hold" rating to a "sell" rating in a research report issued to clients and investors on Saturday.

PFSI has been the subject of a number of other reports. Keefe, Bruyette & Woods upgraded PennyMac Financial Services from a "market perform" rating to an "outperform" rating and set a $115.00 target price for the company in a research report on Monday, March 16th. Wells Fargo & Company cut their target price on PennyMac Financial Services from $135.00 to $110.00 and set an "overweight" rating for the company in a research report on Thursday. Piper Sandler cut their target price on PennyMac Financial Services from $137.00 to $122.00 and set an "overweight" rating for the company in a research report on Thursday, April 2nd. BTIG Research restated a "buy" rating on shares of PennyMac Financial Services in a research report on Friday, January 30th. Finally, Weiss Ratings downgraded PennyMac Financial Services from a "buy (b-)" rating to a "hold (c+)" rating in a research report on Tuesday, January 20th. Six equities research analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company's stock. According to data from MarketBeat, PennyMac Financial Services presently has a consensus rating of "Moderate Buy" and a consensus price target of $131.14.

PennyMac Financial Services Stock Performance

Shares of PFSI stock opened at $91.39 on Friday. PennyMac Financial Services has a 12-month low of $82.65 and a 12-month high of $160.36. The firm has a market capitalization of $4.77 billion, a price-to-earnings ratio of 9.83, a price-to-earnings-growth ratio of 0.54 and a beta of 1.52. The business has a 50 day simple moving average of $89.99 and a 200 day simple moving average of $116.86. The company has a debt-to-equity ratio of 3.32, a current ratio of 0.34 and a quick ratio of 0.34.

PennyMac Financial Services (NYSE:PFSI - Get Free Report) last issued its quarterly earnings data on Thursday, January 29th. The real estate investment trust reported $1.97 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $3.23 by ($1.26). The business had revenue of $538.01 million during the quarter, compared to the consensus estimate of $639.81 million. PennyMac Financial Services had a return on equity of 10.20% and a net margin of 24.48%.The business's quarterly revenue was up 14.4% compared to the same quarter last year. During the same period last year, the company earned $1.95 earnings per share. On average, equities research analysts anticipate that PennyMac Financial Services will post 13.77 EPS for the current year.

Insider Buying and Selling

In related news, Director Patrick Kinsella acquired 2,250 shares of the business's stock in a transaction dated Thursday, February 12th. The stock was bought at an average price of $89.15 per share, for a total transaction of $200,587.50. Following the transaction, the director owned 34,210 shares of the company's stock, valued at approximately $3,049,821.50. The trade was a 7.04% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CEO David Spector sold 10,000 shares of the stock in a transaction on Friday, March 6th. The shares were sold at an average price of $86.39, for a total value of $863,900.00. Following the sale, the chief executive officer owned 80,604 shares of the company's stock, valued at $6,963,379.56. This trade represents a 11.04% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 51,280 shares of company stock worth $5,154,453 over the last quarter. 15.80% of the stock is currently owned by insiders.

Institutional Investors Weigh In On PennyMac Financial Services

Institutional investors and hedge funds have recently modified their holdings of the stock. Hudson Bay Capital Management LP acquired a new stake in shares of PennyMac Financial Services during the 3rd quarter valued at $5,593,000. 140 Summer Partners LP acquired a new stake in shares of PennyMac Financial Services during the 3rd quarter valued at $55,268,000. American Century Companies Inc. lifted its holdings in shares of PennyMac Financial Services by 7.5% in the third quarter. American Century Companies Inc. now owns 429,403 shares of the real estate investment trust's stock valued at $53,195,000 after purchasing an additional 30,015 shares in the last quarter. Picton Mahoney Asset Management lifted its holdings in shares of PennyMac Financial Services by 554.1% in the third quarter. Picton Mahoney Asset Management now owns 28,872 shares of the real estate investment trust's stock valued at $3,576,000 after purchasing an additional 24,458 shares in the last quarter. Finally, EMG Holdings L.P. purchased a new stake in shares of PennyMac Financial Services in the third quarter valued at $6,458,000. Institutional investors and hedge funds own 57.87% of the company's stock.

PennyMac Financial Services Company Profile

PennyMac Financial Services, Inc NYSE: PFSI is a leading mortgage banking company based in Westlake Village, California. The firm operates through two primary business segments: Production and Mortgage Servicing Rights (MSR). In its Production segment, PennyMac originates residential mortgage loans through retail, wholesale and correspondent channels, focusing on both purchase and refinance transactions. The MSR segment involves the acquisition and servicing of mortgage loans, whereby the company earns fees for managing loan portfolios on behalf of investors.

Since its founding in 2008, PennyMac has grown through a combination of organic origination and strategic acquisition of servicing rights, positioning itself as one of the largest residential mortgage loan servicers in the United States.

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