UPDATE: Sterne Agee Downgrades EverBank Financial After Shares Hit $18 Price Target
In a report published Tuesday, Sterne Agee analyst Nathan Race downgraded EverBank Financial Corp (NYSE: EVER) to Neutral from Buy, with a $18.00 price target.
According to the report, the downgrade follows shares reaching their price target of $18.00. Although long-term outlook remains favorable, it is believed that a difficult mortgage origination environment could weigh on the valuation over the near term.
“Over the long-term, we believe that management will be successful in reducing EVER's exposure to mortgage by increasing its banking lines of business, which should result in less EPS volatility and a higher valuation,” the report noted. “However, we believe that origination volumes and gain on sale revenue will be lower than we previously modeled, which will pressure results over the near term relative to Street expectations, based on our modeling.”
Some highlights from the report included:
-”Our revised 4Q13E operating EPS of $0.23 compares to our previous estimate and consensus of $0.25.” -”We believe that originations will drop to $2.1B vs. $2.3B and that the gain on sale margin will drop 10 bp compared to our prior estimates.” -”The 10-year UST yield increased to 3.03% at year-end vs. 2.62% a quarter ago, which should benefit mortgage servicing profitability.”
EVER closed Monday at $17.46 with shares trading down at 3.46 percent.
Latest Ratings for EVER
|Oct 2014||Compass Point||Maintains||Neutral|
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