Shares in three of Canada’s biggest alternative mortgage lenders look set to rise over the next year due to the ongoing resiliency of the country’s housing market.
“Alt-A lenders should continue to see enviable growth,” said Shubha Khan, an analyst at National Bank Financial. “We believe that near-term housing market risks have moderated, particularly in view of more dovish comments on interest rate policy from the Bank of Canada.”
Mr. Khan said credit quality also remains sound with mortgage delinquency rates near historical lows. He increased his price targets on Equitable Trust Inc., MCAN Mortgage Corp. and Home Capital Group Inc. and reaffirmed his outperform rating on all three names.
Equitable Trust can be expected to rise 30% over the next 12 months to $64, while MCAN will jump 22% to $16 over the same period, he said.
Home Capital Group, meanwhile, is set to climb as high as $95 – a 17% gain – after reporting solid third-quarter earnings on Wednesday after market close.
- Alternative mortgage lenders get boost from Canada’s resilient housing market (business.financialpost.com)