Jefferies and KBW Neutral on UWM Holdings (UWMC)

UWM Holdings Corporation (NYSE:UWMC) is one of the 10 Best US Penny Stocks to Buy. On December 19, Jefferies initiated coverage on UWM Holdings Corporation (NYSE:UWMC), giving the stock a Hold rating and setting the price target at $5.

The research firm noted that UWM Holdings Corporation (NYSE:UWMC) is in a good position structurally and has strong operating leverage as the next mortgage cycle approaches. However, Jefferies believes the current share price already reflects a balanced risk-reward profile.

Using forecasts from Fannie Mae, Jefferies expects total mortgage originations to increase to $2.3 trillion in 2026 and $2.5 trillion in 2027.

The firm sees long-term growth potential for UWM Holdings Corporation (NYSE:UWMC). Jefferies pointed to the company’s growing broker channel, cost savings from servicing insourcing expected by 2027, and AI-enabled processes that could help improve loan volumes and gain-on-sale margins.

However, the research firm noted that the current share price of UWM Holdings Corporation (NYSE:UWMC) already reflects “a material portion of the medium-term recovery narrative.”

Earlier, on December 18, Keefe, Bruyette & Woods (KBW) raised its price target on UWM Holdings Corporation (NYSE:UWMC) from $6.50 to $6.75 while maintaining a Market Perform rating on the stock.

UWM Holdings Corporation (NYSE:UWMC) is the indirect parent company of United Wholesale Mortgage (UWM), which is the largest wholesale mortgage lender in the US.

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Disclosure: None. This article is originally published at Insider Monkey.