UWM Holdings pricing initiative ‘an opportune time to establish a position’ – Jefferies

Jefferies upgraded shares of UWM Holdings Corp (NYSE:) to Buy from Hold, raising the price target to $7 from $5.50 per share in a note Friday.

Analysts told investors they are upgrading the stock as market share momentum starts to drop to the bottom line.

“UWMC has accelerated market share gains through its “game on” pricing strategy,” wrote the analysts. “Many competitors have left the wholesale channel as a result.”

“We see the N/T shift in UWMC’s ‘game on’ pricing initiative as an opportune time to establish a position in the stock,” they added.

The analysts concluded that retention of market share shows the value prop of UWMC’s platform, while near-term guidance suggests GOS margins will converge towards long-term averages.

“The stickiness of mkt. share gains while raising GOS margins should improve the go-forward EPS profile of UWMC,” said the analysts.