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PennyMac Mortgage Investment Trust posts Q3 net loss as income drops 63%

By Reuters News


Overview

  • U.S. mortgage REIT reported Q3 net loss and lower net investment income year-over-year

  • Adjusted EPS for Q3 rose sequentially but fell 5% from a year ago

  • Board increased share repurchase authorization by $130 mln, with over $200 mln now available


Outlook

  • Company expects to decrease current dividend in favor of share repurchases

  • Company expects investments from private-label securitizations to deliver low-to-mid-teens ROEs


Result Drivers

  • MARKET CONDITIONS - Co said widening mortgage spreads and rising benchmark interest rates pressured portfolio fair value and reduced book value by 5%

  • PORTFOLIO ROTATION - Co said it rotated capital from lower-yielding assets into higher-returning credit investments, including private-label securitizations

  • SEGMENT PERFORMANCE - Interest rate sensitive strategies segment saw higher pretax income driven by increased income excluding market-driven value changes, while credit sensitive strategies segment posted losses due to wider credit spreads and higher rates


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Loss Per Share

$0.41

Q3 Net Loss

$36 mln


Analyst Coverage

  • The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the specialized reits peer group is "buy."

  • Wall Street's median 12-month price target for PennyMac Mortgage Investment Trust is $10.00, about 37.6% above its October 28 closing price of $7.27

  • The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 8 three months ago


Reuters Recommended Reads

  • Oct 28 - Franklin BSP Realty Trust posts Q3 net loss on credit losses

  • Oct 29 - Blackstone Mortgage Trust posts Q3 loss

  • Oct 28 - KKR Real Estate Finance Trust posts smaller Q3 loss on strong loan repayments


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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