RBC Capital initiated coverage on Essent Group (NYSE:ESNT) with a Sector Perform rating and a price target of $68.00. The stock trades at $61.90, with a P/E ratio of 8.79.
The firm cited favorable expense efficiency and expansion into non-mortgage insurance markets, including property and casualty insurance. However, RBC Capital expects limited earnings and premium growth from the core mortgage insurance business.
Earnings growth is seen as constrained through 2028, with return on equity below 12%. Essent's actual ROE stands at 12% over the last twelve months. RBC Capital noted the company remains well capitalized.
Significant contingency reserve unlocks are anticipated in coming years, supporting non-core business growth and capital return.
Essent Group provides private mortgage insurance and reinsurance for residential mortgage loans in the U.S. According to Bond.az, the company has raised its dividend for 7 consecutive years.
