Market Overview

Regional Banks Gain Following Note from Miller Tabak

Share:
Related RF
Earnings Scheduled For July 19, 2016
Barclays Bank Blitz: Analysts Cut Earnings Estimates For 15 Financial Stocks
Related FMBI
Benzinga's Top Initiations
First Midwest Bancorp, Inc. to Acquire The National Bank & Trust Company of Sycamore , no terms
First Midwest Bancorp's (FMBI) CEO Michael Scudder on Q2 2016 Results - Earnings Call Transcript (Seeking Alpha)

On Tuesday, Miller Tabak released a note on regional bank stocks, specifically Regions Financial (NYSE: RF) and First Midwest Bancorp (NASDAQ: FMBI).

Analyst Thomas Mitchell downgraded shares of Regions from Buy to Hold and upgraded shares of First Midwest from Sell to Hold.

The analyst “remains broadly constructive on regional bank stocks for 2014…but the group will be hard put to show particularly strong earnings progress unless and until long-term interest rates rise enough to underpin solidly higher net interest margins -- a development we believe is highly likely to occur, but whose timing remains hard to pin down.”

Should long-term interest rates remain relatively unchanged, “healthier capital and leverage ratios are likely to keep driving bank valuations modestly higher,” said Mitchell.

Increased mergers and acquisitions activity is “long overdue” and could be a “potential catalyst for group out-performance."

Using a 13.6x 2014 earnings multiple, the analyst calculates a price target of $11.33 and $16.10 for Regions and First Midwest, respectively.

Shares of Regions are up 1.3 percent, while shares of First Midwest are up 3 percent in Tuesday's trading.

Latest Ratings for RF

DateFirmActionFromTo
Jun 2016Keefe Bruyette & WoodsUpgradesUnderperformMarket Perform
May 2016Keefe Bruyette & WoodsDowngradesMarket PerformOutperform
Apr 2016FBR CapitalUpgradesMarket PerformOutperform

View More Analyst Ratings for RF
View the Latest Analyst Ratings

Posted-In: Miller Tabak Thomas MitchellAnalyst Color Upgrades Downgrades Analyst Ratings

 

Related Articles (FMBI + RF)

View Comments and Join the Discussion!