The Key To Unlocking Shareholder Value At CIT Group

In a report published Wednesday, Morgan Stanley analysts maintain their Overweight rating on

. The price target has been lowered from $57 to $54. The company has posted weak results across the board for the quarter. CIT Group reported a sharp decline in new business volumes, with elevated expenses and pressure on net margins due to normalizing interest recoveries. In addition, the timeline for the closure of the OneWest deal seems unclear, although the analysts have expressed their hopes that the deal would be closed by the end of 2Q15. "While the stock could remain weak in the near-term as consensus estimates are likely revised lower, we believe an attractive buying opportunity remains in place ahead of the OneWest close," the analysts said. Morgan Stanley also expects the company to be adversely impacted by non-strategic portfolio exits in 2H15. On the other hand, "the OneWest deal is expected to slash CIT's funding costs by more than 80bps and drive ROE firmly towards double digits," Morgan Stanley added. The EPS estimates for 2015 and 2016 have been reduced, largely due to the decline in new business volumes, increasing NFM compression and higher expenses expected in the near term.