UPDATE: Compass Point Upgrades Provident Financial to Buy Following March 2013 Earnings

In a report published Thursday, Compass Point analyst Jason Stewart upgraded the rating on Provident Financial Holdings PROV from Neutral to Buy, and raised the price target from $16.00 to $18.00. In the report, Stewart noted, “The March earnings report and the recent cheapening of shares makes the risk versus reward of owning PROV favorable, despite what is broadly a more challenging mortgage banking environment and our expectation for substantial 2014 consensus EPS estimate revisions. Given PROV's footprint and origination mix, mortgage banking results should hold up better than most industry peers and more importantly what we view is priced into the stock. The resumption of share repurchases post quiet period should also set a near term floor to the share price. 3Q13 earnings were driven primarily by strong mortgage banking volumes and better than anticipated gain on sale.” Provident Financial Holdings closed on Wednesday at $16.04.