BofA Bullish About LoanDepot's Stock Gains

Loandepot Inc LDI is gaining share in the U.S. mortgage market, which is valued at over $10 trillion, according to BofA Securities.

The LoanDepot Analyst: Derek Hewett initiated coverage of LoanDepot with a Buy rating and a price target of $22.

The LoanDepot Thesis: The company is the second largest non-bank retail originator in the U.S. and there seems to be “plenty of room for additional share gains in the fragmented mortgage origination market,” Hewett said in the initiation note.

LoanDepot has “leveraged its growing consumer brand, proprietary technology platform and data analytics to quickly scale its platform in the retail and wholesale channels,” he noted.

“Key to LDI’s growth has been a highly scalable, tech-driven model that has brought efficiency and scale to what has historically been a manual loan origination process. And we think LDI’s digital-first approach will increasingly resonate with consumers, especially Millennials who are now in their prime home-buying years,” the analyst wrote.

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The company’s market share has expanded from 1.0% in 2014 to 2.5% in 2020 and there could be additional share gains in 2021 and 2022, he added.

LDI Price Action: Shares of LoanDepot had risen by 7.13% to $20.59 at the time of publication Tuesday.

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