Fed Approval Uncertain For CIT Group's Capital Return Efforts

Credit Suisse provided its outlook on CIT Group Inc. CIT, maintaining its Neutral rating and $42 price target. The analysts lowered their EPS estimates to $3.33 for 2016 and to $3.52 for 2017, and initiated a 2018 estimate of $3.90.

They discussed how the Fed approval could impact CIT's repurchase efforts, stating the company will need to get the approval for capital return. The analysts believe the Fed wouldn't approve an amount higher than the proceeds of the Air sale, less any costs incurred in restructuring the company and its balance sheet. Moreover, they think the Fed could limit amounts in any period.

"Lastly, it is unclear whether CIT's conditional objection received from the Fed will have an impact on the pace and timing of capital return." added the analysts.

They estimate the sale price for Air to be announced in the next month or so, and believe this should be a positive catalyst for the stock. However, the analysts noted the company will still need approval from the Fed to distribute all of the proceeds.