Bank of America Lifts Essent Group Target to $68 After Q4 EPS Shortfall
Bank of America raised its price target on Essent Group to $68 from $66 after Q4 results showing $1.60 EPS and $312.4 million revenue. The company wrote $11.8 billion in new insurance policies at 41 basis points and boosted its quarterly dividend to $0.35 per share.
1. Bank of America Price Target Increase
Bank of America raised its price target on Essent Group to $68 from $66 and reiterated a Buy recommendation, based on revised FY26 and FY27 EPS forecasts following Q4 performance. This uptick reflects confidence that the slight earnings miss does not alter the company’s underlying insurance model.
2. Q4 2025 Financial Performance
Essent reported diluted EPS of $1.60 and net revenue of $312.4 million for Q4 2025, both marginally below consensus estimates. Management indicated that while results fell short of projections, core profitability and cash generation remained stable.
3. Insurance Operations and Risk Management
During Q4, Essent wrote $11.8 billion of new mortgage insurance policies at an average premium rate of 41 basis points, while maintaining stable gross premium revenue. The company also transferred portions of its credit risk to high-quality reinsurers, accepting slightly higher costs to mitigate balance sheet exposure.
4. Dividend Increase
Healthy operating cash flows enabled Essent to raise its quarterly dividend to $0.35 per share, marking a continued commitment to shareholder returns. This increase represents an improved yield, reinforcing confidence in the company’s capital management strategy.