Stock of the Day

September 2, 2020

First American Financial (FAF)

$65.02
+$1.59 (+2.5%)
Market Cap: $6.63B

About First American Financial

First American Financial Corporation, through its subsidiaries, provides financial services. It operates through Title Insurance and Services, and Home Warranty segments. The Title Insurance and Services segment issues title insurance policies on residential and commercial property, as well as offers related products and services internationally. This segment also provides closing and/or escrow services; products, services, and solutions to mitigate risk or otherwise facilitate real estate transactions; and appraisals and other valuation-related products and services, lien release and document custodial services, warehouse lending services, default-related products and services, document generation services, mortgage loans subservicing, and related products and services, as well as banking, trust, and wealth management services. In addition, it accommodates tax-deferred exchanges of real estate; and maintains, manages, and provides access to title plant data and records. This segment offers its products through a network of direct operations and agents in various states and in the District of Columbia, as well as in Canada, the United Kingdom, Australia, New Zealand, South Korea, and internationally. The Home Warranty segment provides home warranty products, including residential service contracts that cover residential systems, such as heating and air conditioning systems, and various appliances against failures that occur as the result of normal usage during the coverage period. This segment operates in various states and the District of Columbia. The company was founded in 1889 and is headquartered in Santa Ana, California.

Today's Trend

First American Financial Corporation (NYSE: FAF) shares moved lower as weakness spread across several insurance and financial stocks, despite generally favorable revisions to the company’s earnings outlook. The selloff appears more closely tied to sector sentiment and trading pressure than to a broad deterioration in analyst expectations.

  • Zacks Research raised its estimates for FAF’s third-quarter 2026 EPS to $1.87 from $1.85, fourth-quarter 2026 EPS to $1.80 from $1.78, and full-year 2026 EPS to $7.08 from $7.04. It also increased its forecasts for 2027 and 2028 earnings, including FY2027 EPS to $7.45 and FY2028 EPS to $7.48. These revisions suggest modestly improving expectations for the title insurer’s profitability. Zacks Research Has Optimistic Opinion of FAF Q3 Earnings
  • An article examines First American’s dividend increase and whether it strengthens the company’s capital-return story. A higher dividend could improve the stock’s appeal to income-focused investors, although the article does not indicate that the change alone is driving near-term trading. Does First American Financial Boosting Its Dividend Reframe the Capital Return Narrative?
  • Zacks maintained a “Hold” rating on First American. It raised several longer-term forecasts, but the revisions were relatively small and do not represent a significant change in the investment view.
  • Zacks reduced its first-quarter 2028 EPS estimate to $1.19 from $1.23, partially offsetting the broader series of upward revisions. First American Financial analyst estimates
  • FAF traded lower alongside Radian Group, Fidelity National Financial and Kemper, indicating broad weakness in the insurance and financial-services group. Trading volume was more than twice the stock’s average, suggesting elevated investor activity and pressure from sector-wide selling. Insurance stocks trade down

FAF’s latest reported quarter featured better-than-expected earnings and 15% year-over-year revenue growth, but the current decline indicates that investors are placing greater weight on sector pressure and technical selling than on the modestly improved earnings outlook.

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