PennyMac Financial initiated with a Buy at Jefferies

Jefferies analyst Kyle Joseph initiated coverage of PennyMac Financial Services with a Buy rating and $85 price target. The analyst says the company’s “balanced model” between originations/servicing and a medium-term scenario that both segments will be substantially profitable should drive its return on equity back to historical levels. In originations, PennyMac is also diversified across three channels and has taken share in correspondent/broker, the analyst tells investors in a research note.