Citizens cuts Walker & Dunlop stock price target on fraud concerns

Citizens has reduced its price target on Walker & Dunlop shares (NYSE:WD) to $55, down from $70, while keeping its Market Outperform rating. The firm also lowered its 2027 earnings per share estimate to $4.65 from $5.00. The lower price target and revised EPS figure reflect concerns over ongoing fraud investigations, which Citizens considers a significant headwind for the stock.

The company has identified and set aside most of the fraud-related issues, but investors will likely remain skeptical until the investigations are fully resolved in upcoming quarters. While Citizens believes the stock is currently undervalued, the outlook is clouded by expectations of higher interest rates, with two rate hikes anticipated by mid-2027.

Additionally, the company is benefiting from increased transaction volumes, up 3% year-over-year, and gaining market share with government-sponsored enterprises, now at 14.7% year-to-date compared to 11.2% in 2025. Walker & Dunlop reported its second-quarter 2026 financial results, with adjusted core diluted earnings of $1.19 per share, exceeding Wall Street's estimate of $0.91.

Despite a revenue shortfall, coming in at $306.7 million versus the expected $337.53 million, earnings per share still grew by 3%, surpassing forecasts by 30.77%.