UPDATE: D.A. Davidson & Co. Initiates Coverage on TCF Financial Corporation with Neutral Rating, $18.50 PT as Transition Continues

In a report published Thursday, D.A. Davidson & Co. analyst Stephen Geyen initiated coverage on TCF Financial Corporation TCB with a Neutral rating and $18.50 price target. In the report, D.A. Davidson & Co. noted, “Initiating coverage with a NEUTRAL rating and an $18.50 price target. Although historically, TCB has traded at a 1.9 point P/E discount to peers, we are applying a 0.75 point discount to our forward estimates due to an improvement in bank fundamentals. In our view, a favorable shift in the mix of loans, a broadening out of the sources of fee income, and improved profitability should warrant a higher multiple vs. the stock's historic multiple. Applying this 0.75 point discount to the peer multiple, or 14.8x P/E multiple to forward EPS estimates, we derive our $18.50 price target.” TCF Financial Corporation closed on Wednesday at $16.58.