RDN - Radian: Likely Fairly Valued As Legacy Tailwinds Peak (Rating Downgrade)
2024-05-24 23:56:35 ET
Summary
- Radian's shares have performed well, returning 22% over the past year, and the company has increased its buyback authorization, indicating ongoing capital returns to shareholders.
- The company's core mortgage insurance business is performing well, thanks to high home prices and low inflation.
- Radian's legacy book of policies is likely to have no losses due to rising home prices, but newer policies may face some losses in the future, meaning earnings are peaking.
Shares of Radian ( RDN ) have been a solid performer over the past year returning 22%. Recently, Radian increased its buyback, which points to ongoing and meaningful capital returns to shareholders. I last covered RDN in February , rating shares a buy, and since then they have rallied 14% vs the market’s 4% gain. With shares above my $30 price target, now is an opportune time to determine if investors should take profits. I am moving shares to a hold....
Radian: Likely Fairly Valued As Legacy Tailwinds Peak (Rating Downgrade)