What Happened?
Shares of mortgage REIT PennyMac Mortgage Investment Trust (NYSE: PMT) jumped 3.5% in the afternoon session after Keefe, Bruyette & Woods upgraded the company's stock rating to 'Outperform' from 'Market Perform'. This move from the financial services firm indicated a more positive view of the company's financial prospects. Despite the improved rating, the analyst firm kept its price target for the stock unchanged at $13.50.
After the initial pop the shares cooled down to $13.15, up 3.2% from previous close.
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What Is The Market Telling Us
PennyMac Mortgage Investment Trust’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 27 days ago when the stock gained 2.7% on the news that comments from a key Federal Reserve official boosted hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
PennyMac Mortgage Investment Trust is up 4.7% since the beginning of the year, but at $13.15 per share, it is still trading 11% below its 52-week high of $14.77 from March 2025. Investors who bought $1,000 worth of PennyMac Mortgage Investment Trust’s shares 5 years ago would now be looking at an investment worth $748.15.
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