UPDATE: Bank of America Initiates PennyMac at Neutral on Growth Opportunities

In a report published on Tuesday, Bank of America analyst Kenneth Bruce initiated a Neutral rating on PennyMac Financial Services (NYSE: PFSI) and announced a $23.00 price objective for the company.

In the report, Bank of America commented that, "We are initiating coverage on PFSI with a Neutral rating and $23 Price Objective. We believe PFSI is well positioned to capitalize on growth opportunities in the U.S. mortgage market via its activities in lending and servicing, which should generate attractive EPS growth potential over the next few years. Our longer-term earnings outlook implies 20% 5-yr EPS CAGR, which we find compelling. Given lending volumes remain uncertain in the near term, investors will likely discount optimistic earnings growth until visibility into share growth and refinance activity improves. We are constructive on PFSI, although the overhang from the volume and margin uncertainty needs to clear before PFSI can witness meaningful appreciation."

PennyMac Financial closed on Monday at $21.14