UPDATE: Jefferies Downgrades First Republic Bank to Hold, Lowers PT on Weak Deposit Growth
In a report published Tuesday, Jefferies analyst Casey Haire downgraded the rating on First Republic Bank (NYSE: FRC) from Buy to Hold, and lowered the price target from $44.00 to $40.00.
In the report, Jefferies noted, “We downgrade to Hold given weak deposit growth and lower gain-on-sale (GOS). Loan pipelines remain strong, but deposit growth continues to lag, which will force FRC to sell production despite weaker GOS. FRC is also raising deposit rates to boost funding, which will exacerbate NIM compression. FRC deserves its premium multiple (16x '14), but we see negative revision risk as street plays catch-up to higher deposit costs & weaker GOS.”
First Republic Bank closed on Monday at $39.93.
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