Why Did BTIG Upgrade Essent Group’s Stock?

By Ryan Adsit

In a report released yesterday, Mark Palmer from BTIG upgraded Essent Group (NYSE: ESNT) to Buy, with a price target of $44. The company’s shares closed yesterday at $39.01, close to its 52-week high of $41.44.

Palmer noted:

“Growth + Operating Leverage = Upside for ESNT We are upgrading Essent Group (ESNT) to Buy (from Neutral) with a price target of $44 based on 11x our FY19E earnings per share of $3.97. ESNT’s operating performance during 1H17 was significantly better than we had expected on several fronts, including 30% year-over-year growth in insurance-in-force (IIF) in each quarter, annualized ROE north of 19%, and a default rate of just 0.41% at June 30.”

According to TipRanks.com, Palmer is a 4-star analyst with an average return of 4.3% and a 54.9% success rate. Palmer covers the Financial sector, focusing on stocks such as Santander Consumer USA, Assured Guaranty Ltd, and Synchrony Financial.

Essent Group has an analyst consensus of Strong Buy, with a price target consensus of $44.33.

Based on Essent Group’s latest earnings report for the quarter ending June 30, the company posted quarterly revenue of $138 million and quarterly net profit of $72.12 million. In comparison, last year the company earned revenue of $108 million and had a net profit of $52.26 million.

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Essent Group Ltd. is a holding company, which engages in the provision of banking services. It offers mortgage insurance, reinsurance, and risk management products. The company was founded by Mark A. Casale on July 1, 2008 and is headquartered in Hamilton, Bermuda.