A prominent analyst has downgraded Countrywide Credit to "neutral" because of its stock price.

Jonathan E. Gray, at Sanford C. Bernstein & Co., New York, lowered his stock rating to "market perform," citing the home mortgage industry's strong recovery since he awarded an "outperform" rating a year ago.

His report said the stock is in line with its historical valuation.

Mr. Gray said he has no special problem with the mortgage industry or with Countrywide's place in the market.

In fact, he said he expects earnings per share a year from now to roughly double those in the fiscal quarter that ended last month.

In the report, Mr. Gray said he does not expect the same earnings volatility seen during the price war in the lender's last fiscal year, which ended in February.

"Making conservative assumptions regarding the company's ability to capture market share longer-term, and given stable interest rates - a big assumption," Bernstein estimates Countryide's per-share earnings could grow "at a 15% pace for the next several years," Mr. Gray said.

The report said Countrywide's production volume in the August quarter was up 42% from a year ago, to $8.9 billion. Mr. Gray estimates the lender's current market share is 4.9% of all U.S. originations, up from 3.6% last year. Its share of the purchase origination market is more than double its 2.3% in 1993.

The lender reported a gain of 19 basis points in the sale of loans for the quarter that ended May 31, and Mr. Gray expects Countrywide to report a gain of 27 or more basis points in the August quarter, the report said.

Mr. Gray estimated Countrywide's production for calendar 1995 at around $32 billion, and said that was a conservative estimate. He predicted national production for this year will be about $650 billion.

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