Roth Upgrades New Century Financial to Strong Buy

Analyst Richard Eckert likes the mortgage financier's decision to form a real estate investment trust

Roth Capital upgraded New Century Financial (NCEN ) to strong buy.

Analyst Richard Eckert says he endorses New Century's decision to form a real estate investment trust. He believes there's considerable value to be unlocked in the company, and that the REIT structure could help it deliver that value to shareholders. Eckert thinks a REIT vehicle can help New Century to get off its origination and, perhaps, the GAAP earnings treadmill. A REIT will also insulate equity shareholders from the inherent volatility in the mortgage-banking business, and provide a compelling reason to own the shares regardless of conditions in fixed-income markets or the broader economy.

Eckert raised the $7.25 2004 earnings per share estimate to $8, and upped the $6 2005 estimate to $8. Finally, he raised the $59 target parice to $70.

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