UPDATE: J.P. Morgan Reiterates Underweight Rating, Lowers PT on BancorpSouth

In a report published Monday, J.P. Morgan & Co. reiterated its Underweight rating on BancorpSouth BXS, but slightly lowered its price target from $13.00 to $12.00. J.P. Morgan noted, “With BXS shares trading at 16.0x 2013E EPS, or a 9% premium to peers, we view the shares as overvalued. As BXS continues to make it out of the credit woods, we think the next area the market is going to focus on to gauge upside potential in the name lies in expected growth and profitability levels. When we look at these two items, however, we don't see the required level of growth or profitability levels to render BXS a peer performer. On the growth front, with 10% of loans in construction and 20% of loans in commercial real estate (35% including owner-occupied C&I), as the company remixes its loan portfolio to reduce concentration risk, we see growth metrics as lagging peers. Although many banks have run-off portfolios, most have a lower concentration of CRE loans to exit and are also in faster-growth markets that are more conducive to sustainable C&I loan growth. In total, BXS reported average loan growth contraction of 3% annualized.” BancorpSouth closed on Friday at $14.90.