UPDATE: Compass Point Initiates Coverage on Meridian Interstate Bancorp as Company Isn't a Must-Own Name Yet
In a report published Tuesday, Compass Point analyst Laurie Havener Hunsicker initiated coverage on Meridian Interstate Bancorp (NASDAQ: EBSB) with a Neutral rating and $26.00 price target.
In the report, Compass Point noted, “We initiate with a Neutral rating and a 12-month price target of $26, representing 1.15x market-adjusted fully-converted TB (FCTB). While we believe this will be a must-own name, we do not want to get in the way of exchange ratio math (we are assuming a Mid-Max closing, but note there is risk in the range).
"We have highlighted the current market value and potential price target at each level in the range on page 12, lines 26-27; our current price target will be exchange ratio adjusted following the offering. For those investors who can't stomach the rollercoaster of exchange ratio risk (exchange ratio range: 1.7580-2.7353; or $18 to $27 in value at par with exchange ratio), we suggest waiting for the closing level announcement, and tee-it-up for day-1 aftermarket purchasing.
"EBSB offers investors a unique opportunity to invest in the 3rd largest publicly-traded MA-based bank serving the greater Boston MSA; EBSB is a well-capitalized, 166 year old, clean, $3 billion-asset sized bank (pro forma), trading close to tangible book. We base our valuation on a blended five-pronged approach: 1) Franchise; 2) Peers; 3) Credit; 4) Capital/capital management tools; and 5) Management expertise and ownership.”
Meridian Interstate Bancorp closed on Monday at $24.84.
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