UPDATE: Stifel Nicolaus Downgrades Westamerica Bancorporation to Sell on Valuation

Stifel Nicolaus reduced its rating on Westamerica Bancorporation

from Hold to Sell on valuation and EPS growth challenges ahead. Stifel Nicolaus noted, "We are downgrading the shares of Westamerica to Sell from Hold as the shares are trading at 16x our 2013 EPS estimate, which is well above its historical forward multiple of 14.8x. This premium valuation is in contrast to most of the bank group, which is trading at a discount to their historical forward multiple due to the lack of revenue growth and increased regulatory burden. As result, the shares trade at a 25% premium to peers versus the long-term premium of 7%. Also, we believe the company will face challenges in generating EPS growth in the current environment. We place current fair value for the shares at $43, which represents 11% downside from current levels." Westamerica Bancorporation closed at $48.07 on Friday.