UPDATE: Bank of America Downgrades Regions Financial to Neutral on Valuation
In a research report published today, Bank of America has downgraded Regions Financial (NYSE: RF) from Buy to Neutral.
Bank of America explains in the report, “We are lowering our rating on RF to Neutral, from Buy. Since 3Q11, shares are up 52% vs. 29% for the BKX. Our previous Buy rating was predicated on the market over-discounting credit quality issues at RF. We think this valuation gap has closed. Further, while the sale of Morgan Keegan (MK) for $1.2bn in total cash should limit TARP dilution, the stress test results and the financing of TARP redemption remains up in the air. As such, this near-term overhang could temper upside potential to the stock from here. We lower our '12-‘14E, as we pull out MK's EPS contribution.”
Bank of America maintains its $5.25 PT on Regions Financial, which closed yesterday at $5.23.
