UPDATE: D.A. Davidson Initiates Coverage on MB Financial with Buy Rating, $30 PT on Multiple Positive Factors

In a report published Friday, D.A. Davidson analyst Stephen Geyen initiated coverage on

with a Buy rating and $30.00 price target. In the report, D.A. Davidson noted, “We are initiating coverage of MB Financial with a BUY rating and a price target of $30. MBFI shares trade at a 1-point P/E multiple discount to 2013 EPS versus the D.A. Davidson Mid-cap median of 14.5x. In our view, the outlook for exceptionally good fee income growth, stable credit, good capital ratios and strong profitability ratios that are quite resilient to a decline in mortgage banking suggests that an above peer multiple is appropriate. Anticipating a prolonged slow economic recovery, tightening credit spreads,and the potential impact of regulatory changes to capital requirements on profitability, management began to invest in several fee-based initiatives in 2011. In late 2012, growth in non-interest income began to take off. In 1Q13, fee income was up 30% from the prior year.” MB Financial closed on Thursday at $26.17.