Capital Bank Financial Has 16% Upside According To Credit Suisse

Credit Suisse’s Jill Shea believes that Capital Bank Financial Corp CBF is well positioned “with forecasted improvement in ROTCE to 10 percent by YE17 driven by strong organic growth and the close of the CommunityOne Bancorp COB deal.”

Shea initiated coverage of Capital Bank with a Neutral rating and price target of $33.

Stock Upside

The analyst believes that the stock multiple could move even higher if the company is able to achieve its targets with CommunityOne quickly and undertakes other community bank deals.

The CommunityOne acquisition, announced in November 2015, is expected to be 15 percent EPS accretive once cost savings are fully realized.

Future Growth

“M&A continues to be part of the growth strategy, with a focus on undercapitalized and underperforming banks,” Shea mentioned, while adding that Capital Bank had excess capital to fuel future growth.

The analyst believes that the company is well positioned in come of the best growth markets in the country and that it would witness robust organic loan growth.

“In the near term, the company is managing the pace of growth around the $10Bn asset threshold as the close of CommunityOne puts it within striking distance. We believe CBF is well positioned, as becoming a much larger institution has always been the intent,” Shea added.