PennyMac Mortgage downgraded on low CRT visibility at BTIG

BTIG downgraded PennyMac Mortgage to Neutral from Buy without a price target. The analyst thinks the credit risk transfer program with Fannie Mae could develop as a longer-term opportunity for PennyMac and other lenders, but in the near term the firm expects the government sponsored entities will remain reluctant to share first-loss risk while the cost is relatively high. PennyMac’s dividend could be stable, although catalysts for net asset value upside look more limited, the analyst tells investors in a research note. It estimates the company’s book value is around $15.50 per share.