UPDATE: Compass Point Downgrades CIT Group to Neutral on Fair Value

In a report published Monday, Compass Point analyst Mike Turner downgraded the rating on CIT Group

from Buy to Neutral, but raised the price target from $41.00 to $44.00. In the report, Turner noted, “We are downgrading our rating from Buy to Neutral as we believe the stock is fairly valued at the current level. Capital is robust and the removal of the written agreement could provide a positive catalyst for shares as it should open the door to buybacks. However, our analysis suggests the impact of excess is capital is fully-reflected in the current share price. With an estimated core earnings potential in the mid-to-upper $4.00 range (including the impact of FSA), we see upside to shares over time, though this earnings target will likely take several years to achieve. Absent a meaningful portfolio acquisition that would get them closer to the long-term target of $40B in earning assets, we see a take-out as the remaining source of upside, though we don't have enough confidence to recommend shares purely on that premise.” CIT Group closed on Friday at $43.76.