CoreLogic headwinds loom, market improvement will offset challenges

Market headwinds stemming from refinance and foreclosure volumes could impact CoreLogic in 2013 and 2014, but stock buybacks, better than expected cost savings and CoreLogic’s market share gains will offset these challenges, said analyst Carter Malloy of Stephens regards to the company’s earnings.


As a result, Stephens reiterates its “overweight” rating of CoreLogic (CLGX) and its $28 price target.

The revised estimated first quarter 2013 revenue and adjusted earnings per share estimates are $405 million, or 42 cents a share, up from $380 million, or 39 cents a share, which was revised after the pre-release earnings on Jan. 31, according to Malloy.

For the fourth quarter of 2012, CoreLogic posted revenues of $410 million, up from the projected $387 million, the company said.

Mortgage origination services in 4Q were $176 million with adjusted earnings before interest taxes, depreciation and amortization of $68 million, or 38.7% margin.

The revenue increase reflects increased tax, credit reporting and flood data revenues due to higher mortgage volumes, market shares and price gains, according to the report.

“We expect mortgage volumes to remain steady to slightly down for the next few quarters but fall off in the back half of the year (per industry forecasts), providing room for upside to numbers through the first half of 2013, but headwinds in the second half of 2013 and into 2014,” Malloy said. 

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