New York, Feb 2, 2026, 15:33 EST — Regular session
- PFSI fell roughly 5% in afternoon trading, following a sharp decline after earnings late last week
- KBW cuts its price target to $115 from $143 but maintains a market-perform rating
- Investors are focusing on accelerating mortgage prepayments and the “runoff” of servicing rights
PennyMac Financial Services Inc (PFSI.P) shares fell further Monday, pressured by new target downgrades following its recent earnings report.
The stock has seen swings as investors adjust valuations on mortgage servicing rights, or MSRs — the contracts allowing servicers to earn fees from managing borrowers’ monthly payments. Reuters
Those rights can quickly lose value if borrowers refinance or pay off early. PennyMac has been pushing loan production to make up for those losses, and traders remain fixated on that balance.
PFSI slipped $5.34, or 5.3%, to $94.58 in afternoon trading. The stock hit a low of $90.94 during the session.
Keefe, Bruyette & Woods trimmed its price target to $115 from $143 while maintaining a “market perform” rating, according to a fresh analyst update. This follows similar downgrades last week from Wells Fargo & Company, Piper Sandler, and Barclays. Gurufocus
The stock ended Friday at $99.92, tumbling 33% that day. It’s now roughly 38% below its January 29 closing price of $149.70. Stockanalysis
PennyMac posted a fourth-quarter net income of $106.8 million, or $1.97 per share, on total net revenues of $538.0 million. Chairman and CEO David Spector noted that strong production was “offset by increased runoff on our MSR asset as prepayment speeds increased.” The company announced a quarterly dividend of $0.30 per share, payable Feb. 26 to shareholders of record on Feb. 16. Pennymac
The company reported servicing segment pretax income dropped sharply to $37.3 million from $157.4 million in the previous quarter. Its servicing portfolio, representing unpaid principal balances it manages, totaled $733.6 billion.
Separately, a securities law firm announced it is probing potential claims linked to the late-January selloff in the shares. Businesswire
Bulls face the threat of mortgage rates dropping further, which could accelerate prepayments and intensify MSR runoff, putting servicing earnings under strain. If rates climb instead, refinance demand might slacken, and production may fail to offer the same support.
Investors are on alert for further target adjustments and clues about prepayment trends in the weeks ahead. The next key date to watch is Feb. 16, when the quarterly dividend record date arrives.
