MutualFirst Financial Shares Overvalued, Says D.A. Davidson

D.A. Davidson initiated coverage on MutualFirst Financial, Inc. MFSF with an Underperform rating and $24 price target.

In the Wednesday report, the analysts described the shares of the company as "more than fully valued."

The $24 target is based on the P/E multiple of 15.5x their 2017 EPS estimate of $1.55, which represents a premium of 16.5 percent to its peer group of 13.3x.

Related Link: 1st Source Should Trade At A Premium To Peers, D.A. Davidson Says

The analyst believe MutualFirst should trade at a reasonable premium to its peers given its slightly higher mix of fee income as a percent to total revenues. "While management is pulling all of the right levers to improve the company's operating performance and grow earnings, we believe that at current levels the shares of MFSF are more than fully valued," wrote DA Davidson.

The shares are trading at substantial premium to its peers, which is difficult for the analysts to justify given its modestly lower profitability and higher level of NPAs in the most recent period.

At time of writing, MutualFirst was seen trading at $28.40, down 1.39 percent on the day.

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