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Radian Group shares rise following upgrade

NEW YORK (AP) -- Shares of Radian Group Inc. rose Monday after an analyst upgraded the mortgage insurer's stock.

THE SPARK: Macquarie Equities Research analyst Sean Dargan upgraded the stock to "Outperform" from "Neutral" and raised his price target to $13 per share from $8.50. Dargan said the company could struggle with its earnings in 2013 because of severely delinquent loans. However he expects Radian's results to improve in 2014 and 2015.

He added that the company is better capitalized following its $689 million sale of stock and debt in March, and it is well capitalized compared to its rivals.

THE BIG PICTURE: The Philadelphia company lost $451.5 million, or $3.41 per share, in 2012. Annual revenue dropped to $825.4 million from $1.95 billion.

Analysts surveyed by FactSet expect an adjusted loss of 16 cents per share on sales of $879 million this year. They expect adjusted earnings of $1.02 per share on revenue of $966 million in 2014. For 2015, they expect adjusted earnings of $1.59 per share on sales of $1.06 billion.

SHARE ACTION: Radian Group stock rose 56 cents, or 5.5 percent, to $10.70 in afternoon trading. On April 1 the shares peaked at $11.05, their highest price in almost three years.