KBW cuts Radian, Essent and NMI Holdings stock ratings

Even though Keefe, Bruyette & Woods has downgraded the stock rating on three of the five private mortgage insurers it covers, its analysts are still relatively bullish on the segment.

Radian, Essent and NMI Holdings have all been dropped to a market perform rating from outperform in large measure because of their strong performance year-to-date, which is expected to continue. But when combined with a “lack of near-term catalysts,” the ratings downgrade was implemented, a report from Bose George, Alex Bond and Tommy McJoynt said.

The move equalizes these companies’ ratings with those already on MGIC and Enact. The analysts do not cover the sixth company currently underwriting private mortgage insurance, Arch Capital Group.

“We expect the sector to generate above-normal [returns on…