On Friday, Truist Securities updated its outlook on Fidelity National (NYSE:FNF), increasing the stock's price target from $64.00 to $70.00 while maintaining a Buy rating. The adjustment follows a review of the company's earnings per share (EPS) forecasts for the upcoming years.
The firm has revised its 2024 EPS estimate for Fidelity National downward to $4.47, a slight decrease from the previous forecast of $4.55. The reduction is attributed to the GAAP underperformance observed in the recent quarterly results. Conversely, the 2025 EPS forecast has been raised to $5.80 from $5.65, indicating a positive outlook for the company's performance in the longer term.
The new price target of $70 is based on a multiple of 12 times the firm's 2025 EPS estimate. This valuation also takes into account Fidelity National's significant ownership stake in F&G (FG, Not Rated). Excluding the company's $4.8 billion ownership of 85% of F&G, the target valuation corresponds to just over 15 times the Title earnings of $900 million. This latter multiple aligns with the current-year valuation of title industry peer First American (FAF, Buy).
Truist Securities' updated price target and maintained Buy rating reflect a continued confidence in Fidelity National's market position and future earnings potential. The firm's analysis suggests that, even when considering the divestiture of Fidelity National's interest in F&G, the company's core title earnings continue to support a robust valuation in line with industry standards.
In other recent news, Fidelity National Financial , Inc. (NYSE:FNF) demonstrated resilience amid a challenging market environment, reporting strong Q3 2024 earnings. The company's title business registered pre-tax earnings of $323 million, while total revenue reached $3.6 billion, and net earnings stood at $266 million. FNF's subsidiary, F&G, also reported record assets under management and significant sales growth. Despite a decrease in daily purchase orders, the company saw an increase in refinance orders.
Analyst firm Stephens has upgraded the price target on FNF's shares to $68 from the previous $63, maintaining an Overweight rating. The upgrade reflects confidence in FNF's strong performance and future potential, particularly as the housing and mortgage market approaches a recovery phase. The analyst suggests there is room for further dividend growth, supported by FNF's robust free cash flow.
These recent developments underscore FNF's operational strength and ability to manage market headwinds effectively. The company maintains a strong balance sheet, with $822 million in cash and $4.2 billion in consolidated debt. FNF's balanced capital allocation strategy focuses on dividends, acquisitions, and technology investments, positioning it well for potential future benefits from rate decreases.
InvestingPro Insights
Fidelity National Financial's (NYSE:FNF) strong market position, as highlighted by Truist Securities' analysis, is further supported by recent data and insights from InvestingPro. The company's revenue growth of 23.89% over the last twelve months and a quarterly revenue growth of 29.37% in Q3 2024 underscore its robust performance, aligning with the positive outlook in Truist's report.
InvestingPro Tips reveal that FNF has raised its dividend for 12 consecutive years and has maintained dividend payments for 20 consecutive years, demonstrating a commitment to shareholder returns. This consistent dividend policy complements the company's strong financial position, with liquid assets exceeding short-term obligations.
The current P/E ratio of 21.9 and a PEG ratio of 0.28 suggest that FNF may be undervalued relative to its growth prospects, supporting Truist's bullish stance. Additionally, FNF is trading near its 52-week high, with a one-year price total return of 41.39%, indicating strong market confidence.
For investors seeking more comprehensive analysis, InvestingPro offers 7 additional tips for FNF, providing deeper insights into the company's financial health and market position.
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