Mortgage Finance: Adjusting estimates for PMT, IVR, and SAFE after the Q1 print

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Mortgage Finance: Adjusting estimates for PMT, IVR, and SAFE after the Q1 print

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Mortgage Finance

Adjusting estimates for PMT, IVR, and

SAFE after the Q1 print

Price Objective Change

PennyMac Mortgage (PMT) 26 May 2026

PMT reported an earnings miss excluding market-driven valuation changes. While the Equity

run-rate EPS guide fell below the dividend, PMT is committed to dividend stability. United States

Following the Q1 print, we are adjusting our 26/27 EPS forecasts to $1.18/$1.54 from Mortgage Finance

$1.58/$1.63 due to lower revenue, partially offset by lower operating expense. We are Derek Hewett

lowering our PO to $11 (~0.75x BVPS) from $12 (~0.8x BVPS). We lower our PO and Research Analyst

multiple due to our lower earnings forecast and decline in BVPS. Reiterate Neutral. BofAS+1 646 855 2087

derek.hewett@bofa.com

Invesco Mortgage (IVR)

IVR reported in line earnings, but the economic return was -3.3% as geopolitical tensions

in the Middle East and inflation concerns weighed on results. We remain cautious due to

low earnings visibility and the economic return should continue to lag peers in the near BVPS: Book Value Per Share

term. Following the Q1 print, we are adjusting our 26/27 core EPS forecasts to $2.01

/$1.97 from $2.25/$2.26 largely due to lower spread income. Maintaining $7.75 PO. MBS: Mortgage-Backed Security

Reiterate Underperform.

CRT: Credit Risk Transfer

Safehold (SAFE) UPB: Unpaid Principal Balance

Two Park Hotel assets transitioning from a ground lease to fee simple ownership drove

SAFE’s earning miss. We think ground leases represent an attractive opportunity given LTV: Loan To Value

the long-term nature of the cash flows and capital appreciation. That said, uncertainty GSE: Government Sponsored