UPDATE: Compass Point Initiates EverBank Financial at Neutral on Valuation
Compass Point initiated coverage on EverBank Financial (NYSE EVER) with a Neutral rating and a $15 price target.
Compass Point noted, "Although management has a good track record and the company is taking the right steps to create long-term value, we believe the stock is fairly valued at 1.4x TBV, a slight premium to peers. Our operating EPS estimate for FY13 is $1.28 and $1.35 for FY14, compared to consensus estimates of $1.35 and $1.53, respectively. Our estimates assume asset growth in the mid-teens, the efficiency ratio drops 9%, NIM remains relatively stable and an average gain on sale of 2.4% in 2013. Over the next year, the company will need to significantly lower expenses in order to combat low interest rates and tighter gain on sale margins. If the company can successfully lower expenses and monetize its underutilized capital, we would be more positive on shares."
EverBank Financial closed at $14.50 on Monday.
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