Analysts are divided over what they see as a key question for newly listed mortgage insurer Genworth: whether the company will be able to increase its return on equity to the upper end of its target range.Last week, Genworth reported underlying net profit of A$133.1 million for the six months to June - an increase of 40.7 per cent over the previous corresponding period. It revised its earnings forecast for the full year.Return on equity was 12 per cent. In its prospectus Genworth acknowledged that regulatory capital requirements had held back ROE growth.However, it said it had the potential to implement further capital management initiatives, "which may include, subject to regulatory requirements, allowable reinsurance, qualifying capital instruments and capital reductions that enhance ROE."It has set a long-term ROE target in the low to mid teens. One analyst, Morningstar, has estimated that its cost of equity is 11 per cent.UBS said the run-off of loans insured before 2009, which have high delinquency rates compared with loans underwritten after 2009, would be an "ROE sweetener" for Genworth.UBS has a Buy recommendation on the stock. It said rising house prices, recovering mortgage originations and benign credit losses had supported double-digit top-line growth. This should be maintained for the rest of the year.UBS was disappointed that Genworth's gross written premium fell short of expectations because of a change in the business mix to lower LVR business. Another concern was that delinquencies, at 36 basis points of loans in-force, were above prospectus.Goldman Sachs also has a Buy recommendation on the stock. It said Genworth would get an ROE boost from premium price increases that were yet to flow through its portfolio.BBY took a similar position in its review of Genworth's result, saying that premium price increases would help the company meet its ROE target. BBY has a Buy recommendation on Genworth stock.Morningstar has a Hold on the stock. It said: "Despite strong profitability and cash flow, the company requires high capital levels to support claims risk and, consequently, ROE is typically below our 11 per cent estimated cost of equity."The volatility in this business should not be ignored, given leverage to macroeconomic factors such as unemployment, interest rates and house prices. Conditions can change quickly and have a large impact on profit. Claims costs are likely to trend higher from current lows."CIMB was also sceptical about Genworth's ability to increase its ROE. It said: "The strong claims outcome in this result is unlikely to be repeated in the second half and with a reversion to more normal levels in coming years, we believe Genworth will struggle to boost its ROE much above its cost of capital."CBA Institutional Equities pulled its recommendation back to Neutral after the release of the financial report. It said: "The stock has performed strongly since listing and is now nearing our price target. "As a result we reduce our recommendation to Neutral, although we remain positively disposed to the earnings outlook in the near term."CBA was disappointed with a small pick-up