PennyMac Mortgage Investment Trust reports surprise Q2 net loss

Overview

• PennyMac Mortgage Investment Trust reports Q2 net loss of $2.9 mln, missing analyst expectations

• Company's net investment income at $70.2 mln, impacted by fair value declines

• Correspondent loan production volumes up 11% from prior quarter

Outlook

• Company does not provide specific forward-looking financial guidance for 2025

• Company emphasizes strategic focus on diversifying credit-sensitive investments

• Company confident in management's ability to navigate market uncertainty

Result Drivers

• FAIR VALUE DECLINES - Net investment income impacted by fair value declines due to interest rate volatility

• NON-RECURRING TAX EXPENSE - $14 mln tax expense from repricing of deferred tax balances due to state apportionment changes

• CORRESPONDENT PRODUCTION - 11% increase in correspondent loan production volumes contributed to new mortgage servicing rights

Key Details

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 $13.50, about 7.6% above its July 21 closing price of $12.48

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

Press Release: ID:nBw6hDmbPa