Bank of America-Merrill Lynch raised Genworth Financial Inc (GNW.N) to buy from neutral saying the life and mortgage insurer was an attractive potential rebound story once the financial crisis ends.
The brokerage said though Genworth has substantial exposure to the residential real estate market through its mortgage operations and investment portfolio, the problems in both areas were well known and the risk has largely been addressed.
In our opinion, Genworth has been aggressive on impairments, which suggests less risk of a negative surprise on realized losses going forward, analyst Edward Spehar said in a note to clients.
Spehar lowered his price target by a dollar to $13 as part of the revision based on share price declines for pure-play mortgage insurance companies.
Shares of Genworth closed at $8.69 Wednesday on the New York Stock Exchange.