First American Financial: Sizing Earnings Lift from New Tech Implementation: We See 15%-25% Upside

研报英文原文证据摘录

First American Financial: Sizing Earnings Lift from New Tech Implementation: We See 15%-25% Upside

Deutsche Bank

Research

Rating Company Date

Buy First American Financial 16 June 2026

North America Reuters Bloomberg Rating Buy

United States FAF.N FAF US Price target (USD) 95.00 Price at 15 Jun 26 66.32

52-week range 71.12 – 54.73

Financial

Consumer Finance Valuation & Risks

Sizing Earnings Lift from New Tech

Implementation: We See 15%-25% Upside MarkResearchDeVriesAnalyst

+1-212-250-4081

As FAF transitions from the development and testing phase of its two major

Michael Dunlevy, CFA enterprise initiatives - Endpoint and Sequoia - to the implementation phase, we Research Associate

believe the company is on the verge of significant automation that could boost +1-212-250-9888

earnings power meaningfully higher. In this report we estimate the potential

expense saves and earnings lift that we believe are not currently reflected in

estimates.

With FAF trading at a modest 9x 2027 consensus EPS that has 15%-25% upside

from this new tech implementation, with even more upside from an

underappreciated data center driven tailwind for commercial title (see note from

5/6/26), we believe FAF has multiple levers of outperformance and reiterate our

Buy rating.

Endpoint and Sequoia Should Deliver Significant Automation

and Expense Saves, Boosting Earnings Power 15%-25%

As management has discussed over the last few years, it has been investing in

new systems for AI-powered title decisioning (Sequoia) and escrow and

settlement services (Endpoint) which they have been testing in a pilot program

and are now in the early stages of a full roll out. While management is optimistic

that Sequoia will improve the speed and efficiency of title decisioning, we get the