UPDATE: Oppenheimer Initiates Coverage on Ocwen Financial Corporation with Outperform Rating, $66 PT on Beneficial Trends

In a report published Tuesday, Oppenheimer analyst Ben Chittenden initiated coverage on Ocwen Financial Corporation OCN with an Outperform rating and $66.00 price target. In the report, Oppenheimer noted, “We are initiating coverage of Ocwen (OCN) with an Outperform rating and $66 PT. We view the ongoing changes in the mortgage servicing industry as a multi-year story that is only in the early to middle innings. Ocwen should benefit from the trends. The company has a pro forma servicing portfolio of $525B with a pipeline of $400B +, and in our view, can realize $200-$300B of this over the next 2-3 years. OCN is moving toward a capital-light business model which should shift valuation toward an EV/EBITDA approach. The company is less levered than peers and thus looks attractive based on our 2014E EV/EBITDA and trading at 7.3x vs. 10.3x for NSM and 22.3x for WAC.” Ocwen Financial Corporation closed on Monday at $54.83.