- Analysts Robert W. Baird and Bank of America have significantly lowered their price targets for Fair Isaac (NYSE:FICO), reflecting potential headwinds.
- Changes in mortgage rules by Fannie Mae and Freddie Mac, favoring alternative scoring models like VantageScore, could impact the widespread use of FICO scores by lenders.
- Despite market pressures and analyst downgrades, Fair Isaac’s stock recently saw an 11.69% increase, though it has experienced considerable volatility over the past year.
Fair Isaac makes credit scores that lenders use to assess borrowers, including people applying for mortgages. Robert W. Baird lowered its price target for the stock to $1,070 from $1,549. A price target is an analyst’s estimate of where a stock may trade in the future.
FICO traded at $661.75 when Baird posted the target. That puts the new target about 62% above the share price, even after a $479 cut. Bank of America also halved its price target, but the stock later fell below that revised level, as highlighted by 24/7 Wall St.
Mortgage rule changes may affect how widely lenders use FICO scores. Fannie Mae and Freddie Mac are moving from two pricing structures to one, putting the lower-cost VantageScore model on the same grid as FICO Classic. That could make the alternative easier for lenders to choose. Benzinga also reports criticism of FICO’s scoring fees.
Reports describe a sell-off linked to these pressures, but the supplied quote shows FICO at $661.75, up $69.28, or 11.69%. The shares traded between $620 and $675.87 during the day. They have ranged from $586.05 to $1,886.28 over the past year.
