UPDATE: D.A. Davidson Raises PT on CVB Financial Following 2Q13 Review

In a report published Friday, D.A. Davidson analyst Gary P. Tenner reiterated a Neutral rating on CVB Financial CVBF, and raised the price target to $14.00.

In the report, D.A. Davidson noted, “Maintaining NEUTRAL rating and increasing price target to $14, representing a 1.8x multiple on 2014E TBV and 14x our revised 2014 EPS estimate of $1.00. Positive estimate revisions and expansion of bank sector multiple are key drivers of our price target increase. Recent improvements in loan production and pricing are positives, although the dairy segment continues to be somewhat weak. Credit continues to improve and the potential for further reserve release is a possible driver of upward EPS revisions over the second half of 2013. CVBF reported 2Q13 EPS of $0.23, three cents above our estimate and a penny above the Street. Relative to our model, the upside was due to a $6.2 million negative provision, stronger fee income (OREO sale gain), and lower expenses offset by weaker spread income. The negative provision added $0.04 to EPS.”

CVB Financial closed on Thursday at $13.39.