UPDATE: Morgan Stanley Downgrades Popular on Weakening Puerto Rico Economy
In a report published Thursday, Morgan Stanley analyst Ken A. Zerbe downgraded the rating on Popular (NASDAQ: BPOP) from Equal-Weight to Underweight, and lowered the price target from $32.00 to $25.00.
In the report, Morgan Stanley noted, “We are Underweight shares of Popular as we believe a deteriorating Puerto Rican economy could drive provision expense of $303 million, materially higher than consensus is building in. This puts our 2014 EPS estimate 29% below consensus. We believe BPOP will trade at 10x 2015e EPS, or $25.”
Popular closed on Wednesday at $29.09.
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