Home Capital Group Inc T.HCG

Recession analysis

[HermannHaller]

According to TD, in a 'severe recession' HCG still makes $3.86 EPS next year. That's the worst case scenario they model, they don't expect a severe recession. The analyst forecast is for $6.12 EPS.

Comforting to know that the company would still be profitable, obviously growing book value, and able to pay a big dividend under those conditions.

[caretired1]

Besides maintaining margins the biggest factor in the companies estimates and hence the valuation thesis was a 20% growth in their book this year. That's the number to watch for. In Feb RBc had a $56 target and nobody wanted an sib back when it was $40 when it "for sure" was going higher.  The sector is out of favour until more clarity in a hard or soft landing is in the cards.

[HermannHaller]

I was one of the ones far too bullish last fall. I didn't anticipate the level of pessimism and recession talk we now have. No one wants to touch HCG now, regardless of valuation. Which probably means it's a better time to buy. Haha. Good luck.

[canader]

In this market there are so many companies for sale on the cheap. I continue to buy HCG and others. Like a little kid in a candy shop on 50% sale day. ( Be willing to hold for a while. The market ain't gonna turn tomorrow ) GLTA cept the Dhorties of course  

[HermannHaller]

RBC today lowered target price to $37, but actually RAISED estimates for HCG. The lower target was part of a report that lowered the target for all companies under coverage. RBC's estimate now for earnings for 2023 is $6.97, up from $6.49. So the stock is at 3.6x earnings.