Walter Investment Management Corp Given New $18.00 Price Target at Compass Point (WAC)
Research analysts at Compass Point decreased their target price on shares of Walter Investment Management Corp (NYSE:WAC) from $23.00 to $18.00 in a report released on Monday. The firm currently has a “sell” rating on the stock. Compass Point’s price target would suggest a potential downside of 29.41% from the company’s current price.
The analysts wrote, “We reiterate our Sell rating and lower our price target on WAC to $18 from $23 following the 2Q14 earnings release. The second quarter earnings release was in-line with our expectations as a bounce back in amortization expense pushed servicing margins lower, origination earnings benefited from a larger HARP-eligible servicing portfolio, and the company guided to lower earnings in the back half of 2014. However, the vast majority of the 2Q14 earnings report was driven by HARP originations and there are a series of regulators investigating WAC’s servicing practices. “We expect the expense associated with addressing regulators concerns (as we have seen from other servicers) and the impact of refi burnout on origination revenue to make it difficult for WAC to sustain GAAP earnings above $0.50 per share over the next several quarters. Due to these pressures, we believe the consensus estimates for FY15 remain too high at $4.94 per share and do not reflect the true economic returns to shareholders. Our estimates for ‘adjusted’ operating earnings as reported by WAC in FY15 is $3.14 (apples to apples to street estimates), but on our interpretation of operating earnings, we estimate $2.55 for FY15. Our $18 price target is 7x our $2.55 estimate. We are adjusting our FY14E operating EPS to $3.50 from $2.83 due to this quarter’s results and elevated gain on sale revenue. Our FY15E operating EPS falls to $2.55 from $3.26.”
In other Walter Investment Management Corp news, CFO Gary Tillett purchased 7,900 shares of the stock in a transaction dated Wednesday, August 13th. The shares were purchased at an average price of $24.83 per share, with a total value of $196,157.00. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this link.
Other equities research analysts have also recently issued reports about the stock. Analysts at Credit Suisse reiterated an “outperform” rating on shares of Walter Investment Management Corp in a research note on Tuesday, August 12th. They now have a $40.00 price target on the stock, down previously from $44.00. Separately, analysts at Keefe, Bruyette & Woods cut their price target on shares of Walter Investment Management Corp from $30.00 to $26.00 in a research note on Tuesday, August 12th. They now have a “market perform” rating on the stock. Finally, analysts at FBR Capital Markets downgraded shares of Walter Investment Management Corp from an “outperform” rating to a “market perform” rating in a research note on Tuesday, August 12th. They now have a $28.00 price target on the stock, down previously from $32.00. Three equities research analysts have rated the stock with a sell rating, four have assigned a hold rating and one has issued a buy rating to the company’s stock. The stock has a consensus rating of “Hold” and an average price target of $31.83.
Shares of Walter Investment Management Corp (NYSE:WAC) traded down 1.25% during mid-day trading on Monday, hitting $25.18. 163,223 shares of the company’s stock traded hands. Walter Investment Management Corp has a 52 week low of $23.51 and a 52 week high of $41.85. The stock has a 50-day moving average of $27.68 and a 200-day moving average of $28.3. The company has a market cap of $949.4 million and a price-to-earnings ratio of 11.24.
Walter Investment Management Corp (NYSE:WAC) last issued its quarterly earnings data on Monday, August 11th. The company reported $1.19 EPS for the quarter, missing the Thomson Reuters consensus estimate of $1.22 by $0.03. The company had revenue of $413.71 million for the quarter, compared to the consensus estimate of $381.07 million. During the same quarter in the prior year, the company posted $4.75 earnings per share. The company’s quarterly revenue was down 30.6% on a year-over-year basis. Analysts expect that Walter Investment Management Corp will post $5.42 EPS for the current fiscal year.
Walter Investment Management Corp., together with its subsidiaries, is a fee-based business services provider to the residential mortgage industry.
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