KBW Upgrades Malvern Bancorp After Meeting With Its CEO

In a report published Monday, analysts at Keefe, Bruyette & Woods upgraded the rating on

from Market Perform to Outperform. The price target was raised from $13 to $16. The meeting with CEO Tony Weagley increased the analysts' confidence in the company's profitability and growth prospects. The company has been witnessing a "positive operating momentum," while its profitability has been increasing, driven by the new management team. In addition, the analysts believe that "[c]ontinued growth in earnings power should reflect stable expenses as revenue-generating headcount investments are funded by saves in other areas. We would expect loan growth to accelerate to drive revenue expansion on this relatively stable expense base." The positive outlook for Malvern Bancorp, according to the report, is further supported by the robust demographics of the Main Line Philadelphia business, along with capital flexibility and DTA recovery, which is expected to drive organic growth. The company had posted its EPS for F2Q15 ahead of the estimate, a trend the analysts believe is sustainable. The EPS estimates for 2015 and 2016 have accordingly been raised from $0.26 and $0.47 to $0.44 and $0.76, respectively.