UPDATE: Sterne Agee Downgrades Pinnacle Financial Partners to Neutral

Sterne Agee has published a research report on Pinnacle Financial Partners

and has downgraded the company from Buy to Neutral. In the report, Sterne Agee writes, "PNFP's shares appreciated by ~18% in 2011, which was due to a ~48% jump in the share price in 4Q11. As a result, the market has revalued the shares to 147% of TBVPS compared to 106% a quarter ago. Although we are removing our formal price target, our DCF/NPV model suggests a fair present value of ~$16½, assuming a P/E of 15x our 2013E EPS and a discount rate of 11%. Given the attractive demographic profile and business friendly nature of the Nashville and Knoxville markets, many acquirers would be interested in PNFP. However, the ability to redeem TARP without significant share dilution and an improved profitability and growth outlook increase the likelihood that PNFP will remain independent, in our judgment. Nonetheless, we estimate that PNFP would fetch $19-$23 per share, or 14x-17x our 2013E EPS, in a takeover." Pinnacle Financial Partners is currently trading up $0.10 from Friday's $16.15 closing price.