AI Stock Memo: FAF - First American Financial - RankAlpha

FAF

Rating buyAI Memo

First American Financial

As of 2026-02-13/Confidence medium

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Data freshness

AI Memo

As of 2026-02-13 • Model: RankAlpha Sentiment AI

Decision Panel

Action, confidence, horizon, and decision blockers at a glance.

Action

buy

Confidence

medium

Horizon

—

Key catalyst

Regulatory/litigation resolution (title-related claims) • 2026-05-14

Expected move: +17%

Biggest risk

Prolonged mortgage weakness or adverse regulatory/litigation outcomes force higher reserves and compress margins, pushing shares toward analyst lows near the low $60s.

Invalidation

Break below $61 or thesis failure.

What would change my mind?

Sustained improvement in home sales and refis, plus margin recovery and accelerated buybacks/dividends, drives title volumes and pushes valuation toward analyst highs in the low-$90s.

Research note

Recommendation

buy

Confidence

medium

As of

2026-02-13

Base target

$76

p=55%

Bull target

$92

p=25%

Bear target

$61

p=20%

Key bullets

Fast scan of bull, bear, and watch items

BullKey bullets

FY25/Q4 earnings release and FY26 guidance
Share-repurchase / capital-return announcement
Sustained mortgage-rate decline and housing rebound

BearKey bullets

Capital allocation missteps or inadequate reserves
Sustained decline in mortgage originations
Title-insurance litigation or regulatory fines

WatchKey bullets

Regulatory/litigation resolution (title-related claims)

Summary

High-level snapshot

Recommendation

buy

Model confidence

medium

Timeframe

Asset

Equity

Trigger

Base case: $76 (p=55%)

Bull/Bear spread: +43% / -5%

Vs latest close: Bull +43% · Base +17% · Bear -5%

Scenario probabilities

Bull Target: $92 (p=25%)Base Target: $76 (p=55%)Bear Target: $61 (p=20%)

Commentary

Market consensus skews mildly bullish with median targets above the anchor and a visible analyst high/low spread reflecting macro and litigation uncertainty [#SERP-3][#SERP-4]. Recent aggregator snippets show average targets above the current price but clustered, implying some upside already expected [#SERP-2].

As of 2026-02-13 • Updated bi-weekly / post-earningsSource: Internal modelMethodology

Analyst Summary

Thesis highlights from the latest analysis

Bull Case

Sustained improvement in home sales and refis, plus margin recovery and accelerated buybacks/dividends, drives title volumes and pushes valuation toward analyst highs in the low-$90s.

Bear Case

Prolonged mortgage weakness or adverse regulatory/litigation outcomes force higher reserves and compress margins, pushing shares toward analyst lows near the low $60s.

Drivers

Scannable catalysts and supporting factors

FY25/Q4 earnings release and FY26 guidance
Share-repurchase / capital-return announcement
Sustained mortgage-rate decline and housing rebound

Human Analyst Targets

External snippets for comparison only; verify at source.

Unverified externalLast fetched 2026-02-13Source quality: external scrape

External snippets are unverified; treat as directional signals only. Always confirm with the original provider.

Inline RA est

Provider

serper

Median (USD)

$76.40

Range (USD)

$61.44 - $92.40

Count

Query: First American Financial Corp Common (FAF) analyst consensus price target high low average

First American Financial Corporation (FAF) - Yahoo Finance
Search result #1
Q4. FY25. 0. 500M. 1B. 2B. 2B. View More. Analyst Insights: FAF. View More. Analyst Price Targets. 68.00. 77.20 Average. 66.14 Current. 90.00 High. Analyst ...
Open source
First American Financial Corporation (FAF) Stock Forecast, Price ...
Search result #2
The average price target is $73.00 with a high forecast of $81.00 and a low forecast of $68.00. The average price target represents a 8.41% change from the last ...
Extracted: $73.00, $81.00, $68.00Open source
FAF - First American Financial Corporation (NYSE) - Fintel
Search result #3
The average one-year price target for First American Financial Corporation is $78.34. The forecasts range from a low of $68.68 to a high of $92.40. A stock's ...
Extracted: $78.34, $68.68, $92.40Open source
Consensus First American Financial Corporation - MarketScreener
Search result #4
Mean consensus. OUTPERFORM ; Number of Analysts. 5 ; Last Close Price. 61.44USD ; Average target price. 77.20USD ; Spread / Average Target. +25.65%.
Extracted: $61.44, $77.20Open source
A Look At First American Financial (FAF) Valuation As Earnings And ...
Search result #5
With shares already up over the past year and the stock trading about 15% below the average analyst price target, the key question now is ...
Open source2 days ago
First American Financial (FAF) Price Targets
Search result #6
The forecasts range from a low of $68.00 to a high of $88.00. The average price target represents an increase of 14.17% from the last closing price of $67.09.
Extracted: $68.00, $88.00, $67.09Open source

Scenarios

Bull Target (Scenario probability)

$92 / p=25% prob

Base Target (Scenario probability)

$76 / p=55% prob

Bear Target (Scenario probability)

$61 / p=20% prob

Price $65 as of 2026-06-01

Nearest Scenario: Bear (∆ 5%)

Targets vs latest close: Bull +43% · Base +17% · Bear -5%

Sentiment & Exposure

Sentiment unavailable: insufficient coverage

Events

Other notable items detected

EVENT2026-05-14
Regulatory/litigation resolution (title-related claims)
Settlement or adverse ruling on title litigation or regulatory action could materially re-rate reserves and multiples; timing uncertain—date is an assumption at the end of a near-window [#SERP-1][#SERP-4].
Prob 25.00% • Move 12.00% • Priced-in 30.00%

Short-term Catalysts

Next few weeks

FY25/Q4 earnings release and FY26 guidance
2026-05-14
Quarterly results and management guidance will move price via title-insurance loss ratios and mortgage activity; market consensus targets and analyst commentary provide framing [#SERP-4][#SERP-1].
Prob 99% • Move 10% • Priced-in 60%
Share-repurchase / capital-return announcement
2026-05-14
Board/management may accelerate buybacks or dividends if cash flow and reserves permit; analysts frequently cite capital allocation as upside driver [#SERP-2][#SERP-6].
Prob 40% • Move 5% • Priced-in 50%

Long-term Catalysts

Months to a year

Sustained mortgage-rate decline and housing rebound
2027-02-13
A prolonged fall in mortgage rates would raise purchase/refinance activity and title-insurance volumes, supporting revenue expansion over a 12‑month horizon [#SERP-7][#SERP-3].
Prob 30% • Move 25% • Priced-in 40%

Risks

Capital allocation missteps or inadequate reserves
Sustained decline in mortgage originations
Title-insurance litigation or regulatory fines

Peers

Symbol	Summary
FNF	Largest title-insurance competitor; comparable exposure to housing cycles and capital allocation drivers.
STC	Smaller title insurer; useful operational comparator for origination sensitivity and claims trends.
ORI	Diversified insurer with title exposure; provides a conservative capital/earnings peer view.

Sources

Internal and external references used in this analysis

Model source: RankAlpha Sentiment AI
Human targets: serper
Targets query: First American Financial Corp Common (FAF) analyst consensus price target high low average
Analysis date: 2026-02-13