Onity Group Q3 revenue beats estimates, adjusted profit rises

Overview

• US mortgage servicer's Q3 revenue slightly beat analyst expectations

• Adjusted pre-tax profit rose to $30 mln, driven by improved servicing profitability

• Company repurchased 6% of shares outstanding, boosting book value per share

Outlook

• Company reaffirms previous guidance on adjusted ROE range, servicing UPB growth, MSR hedge effectiveness, and operating efficiency

Result Drivers

• SERVICING PROFITABILITY - Co said improved servicing profitability offset declining originations profitability, helping return to profitability

• SERVICING ADDITIONS - Co reported $24.7 bln in total servicing additions and $53 bln in subservicing additions, exceeding full year target

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Onity Group Inc is $50.00, about 62.9% above its November 4 closing price of $30.70

• The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 6 three months ago

Reuters Recommended Reads

• Nov 4 - UWM Holdings Q3 adjusted EPS beats estimates

• Nov 4 - Enact Holdings Q3 revenue misses expectations on lower refinance activity, reinsurance impact

• Nov 4 - Radian Group Q3 revenue beats expectations

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)