Zinger Key Points
- Mr. Cooper benefited from a strong year in 2024 due to elevated interest rates.
- The company’s stock is likely to be driven by share growth in the servicing and origination market in 2025.
Mr. Cooper Group Inc COOP is poised for continued market share growth in servicing and originations in 2025, according to JMP Securities.
The Analyst: Analyst Mikhail Goberman initiated coverage of Mr. Cooper Group with a Market Outperform rating and a price target of $115.
The Thesis: The stock's current valuation is significantly below that of its mortgage peers, Goberman said in the initiation note.
Check out other analyst stock ratings.
Mr. Cooper had an "exceptionally strong" year in 2024, benefiting from "a favorable environment for mortgage servicing rights as interest rates remained elevated," he stated.
The analyst expects the stock to "appreciate over time," driven by "valuation expansion as the company is able to demonstrate strong financial results and continued servicing and origination market share growth in 2025."
Mr. Cooper's performance is likely to be less impacted by interest rate changes and its "capital-light, fee-income-based subservicing business should provide significant earnings support," he further wrote.
COOP Price Action: Shares of Mr. Cooper Group had risen by 3.98% to $95.92 at the time of publication on Tuesday.
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