FAF Stock Forecast & Price Target

First American Financial Corp has demonstrated robust performance indicators, including a 14% increase in commercial open orders during the first three weeks of October, driven by strong momentum across various sectors such as industrial and logistics. The company’s title margin estimates have also shown improvement, projected at 11.5%, 11.7%, and 12.4%, up from previous estimates, reflecting enhanced efficiency and profitability within its title insurance segment. Furthermore, significant increases in the average commercial fee per file, anticipated to rise by 25% in 2025, alongside potential growth in purchase mortgage volumes should interest rates decline, contribute to a favorable outlook for the company’s financial performance.

First American Financial Corp faces a challenging outlook as expectations for residential volumes have been adjusted downward for the years 2025 to 2027, with growth rates now projected at +9%, +6%, and +5%, respectively. The decline is further compounded by a forecasted moderate decrease in net investment income, reflecting ongoing issues in the broader housing market evidenced by a 6% drop in open purchase orders due to weakened demand for new and resale homes. Additionally, the anticipated slow recovery of the residential mortgage market through 2027 raises concerns about the company's performance and profitability in the near to medium term.