RDN - MGIC Radian downgraded at BofA on lower premium rates sentiment

MTG Investment (NYSE:MTG) -2.8% and Radian Group (NYSE:RDN) -5.2% drift lower after Bank of America analyst Mihir Bhatia downgrades the shares on weaker sentiment for the mortgage insurance sector. Cuts MTG Investment (MTG) to Neutral from Buy; downgrades Radian (RDN) to underperform from Buy. The analyst notes that lower premium rates are weighing on top-line growth. "Concerns about longer-term returns (given lower premium rates) and competitive intensity are also weighing on investor sentiment," Bhatia writes in a note to clients. Meanwhile, Bhatia picks Essent (NYSE:ESNT) -2.2% as the top pick in the sector, expecting 14% potential return looking out one year. In the past year, MTG +29%, RDN +14.7% and ESNT +0.6% lag the broader stock market (SP500) +32%, as seen in the chart below. Previously, (May 7, 2020) mortgage insurers advanced on better-than-expected earnings in Q1.

For further details see:

MGIC, Radian downgraded at BofA on lower premium rates, sentiment