UPDATE: BTIG Research Initiates Coverage on Flagstar Bancorp with Buy Rating, $18 PT on Potential to Overcome Challenges

In a report published Wednesday, BTIG Research analyst Mark Palmer initiated coverage on

with a Buy rating and $18.00 price target. In the report, BTIG Research noted, “Flagstar Bancorp (FBC) has yet to complete its recovery from the damage it sustained during the financial crisis: it has not repaid the TARP funds it received from the U.S. Treasury during the downturn, still faces legacy costs associated with breaches in representations and warranties (R&Ws) on mortgages it sold into securitizations, and continues to have a high percentage of non-performing loans (NPLs). However, we believe the company's earnings power and other resources appear more than sufficient to allow it to overcome the challenges that remain – and that its shares should appreciate as it does so.” Flagstar Bancorp closed on Tuesday at $13.24.