UPDATE: Sterne Agee Upgrades CapitalSource; Raises PT

According to a research report published this morning, Sterne Agee has upgraded CapitalSource CSE from Neutral to Buy, and raised PT from $7.35 to $7.50. In the report, Sterne Agee said, "CSE reported a stronger than expected quarter driven by better credit performance and lower than expected operating costs. The company should continue to see gains on both these fronts and to use holding company cash to buy back stock and retire higher cost capital. We are increasing our PT to $7.50 and raising the rating from NEUTRAL to BUY." CapitalSource closed yesterday at $6.45.