Australia's Helia falls as Morningstar flags valuation concerns

Shares of Helia Group fall as much as 2.7% to A$5.38, their largest intraday pct drop since October 20

Morningstar views stock as "overvalued", citing negative operating leverage as demand in the lenders mortgage insurance (LMI) business shrinks

The LMI provider on Wednesday reported a third-quarter gross written premium of A$66.1 million ($42.95 million)

Analysts note a 33% rise in co's Q3 gross written premium, driven by higher lending volumes, but flag that results trail historical levels, with demand hurt by the government's expanded 5% deposit scheme and higher interest rates

Say that although Helia aims to win new clients, analysts don't factor that potential upside in their forecasts

However, analysts lower uncertainty ratings, considering tightened lending standards by banks, and improved exposure management by co

Stock up 40.6% YTD, including the day's moves

($1 = 1.5389 Australian dollars)