First American Financial Corporation (FAF)
Unrecognized, Unloved, and Undervalued
We initiate coverage on First American Financial at Buy with a target price of $47.18. FAF is a high quality pure play title insurer with a solid 26.7% market share and a business primed towards the recovering housing market, a return to high margin products, a near-term decrease in operating costs, and gross underleverage. In our view, FAF is a fundamentally solid company in a cyclical industry upswing that is currently being undervalued by the Street, trading at 0.37x EV/T12M Sales and 1.61x Price/Tangible BV.
- Increasing rates and decreasing refinance volume will hinder growth in the short term. Refinance open orders per day have fallen from 3,100 in
Only subscribers can access this article, which is part of the PRO research library covering 3,573 different stocks.
Growing numbers of fund managers and other investment professionals subscribe to Seeking Alpha PRO for equity research that is unavailable elsewhere, so they can: