Buckingham Sees 18% Upside In E*Trade Financial Shares

Buckingham Research Group initiated coverage on E*TRADE Financial Corp

with Neutral Rating on Tuesday. It suggests $29 price target, which implies 18 percent upside from current levels. The analysts provided several positive aspects for the company, including: • Solid EPS growth potential (forecasting 31%/11% in 2016/2017 with flat rate expectations) • Ongoing capital deployment opportunities (buybacks near-term, balance sheet expansion longer-term) • An opportunity for an improving core brokerage "story". Buckingham believes E*TRADE presents compelling risk/reward at current levels with 34 percent upside potential for the stock in a bull case scenario and 16 percent downside in a bear case. "Our $29 PT is based on a PE multiple of 17x our 2017 EPS estimate of $1.69, a discount to ETFC's 1-yr forward PE average (23x). ETFC is currently trading at 16x/14x our 2016/2017 EPS estimates respectively." wrote Buckingham.