S&P Lowers Regions Financial (RF) To Hold From Buy
March 18, 2010 1:14 PM
S&P analyst, E.Oja, lowered Regions Financial (NYSE: RF) to hold from Buy, today, on price appreciation.
Shares are up nearly 14% in March and 45% year-to-date, vs. about 10% and 23%, for the S&P Regional Bank index.
“They are nearing our target price of $8, which we are keeping. While shares may appear attractive based on book, at 1.19X our 12/31/10 tangible book value, they are at a 135% premium to peers and 40X our 11 EPS estimate of $0.19.”
The shares are a 25% premium to peers, 18X multiple on S&P’s 12 EPS estimate of $0.42. S&P expects RF to raise additional equity capital this year to bolster its below-peers capital levels.
The Morningstar 5 star, FBR Small Cap Financial Fund (FBRSX), which I wrote about here a few weeks ago (search for article) is up 16.2% year to date, which indicates that the regional banks, and smaller banks have had a nice ride, year to date.
steve schuster
