OFG Bancorp Down to Strong Sell - Analyst Blog

Zacks Investment Research downgraded OFG Bancorp (OFG) to a Zacks Rank #5 (Strong Sell) on Jan 18, 2014.

Why the Downgrade?

Expectation of poor performance in the fourth quarter 2013 has made us downgrade the rank on OFG Bancorp. We currently have an Earnings ESP (Expected Surprise Prediction) of -21.4% for the fourth quarter. The negative Earnings ESP indicates that the Most Accurate estimate of 33 cents is lower than the Zacks Consensus Estimate of 42 cents. OFG Bancorp is scheduled to release its fourth quarter 2013 results on Feb 3, 2014.

The pessimism for fourth quarter results has been triggered largely by OFG Bancorp's weak third quarter performance. The share price of the company has fallen 7.3% since the third quarter release on Oct 28, 2013. A brief snapshot of third quarter results has been provided below.

OFG Bancorp's net income per share available to common shares was 34 cents, half of 68 cents reported in the sequentially preceding quarter and 15% below the Zacks Consensus Estimate of 40 cents. Total revenue was down 9.5% sequentially while operating expenses declined 4.0%.

In the last 60 days, the Zacks Consensus Estimate of OFG Bancorp has gone down by 0.5% to $1.82 for 2013 and by 1.9% to $1.73 for 2014. Also, Earnings ESP is -5.5% for 2013 -10.4% for 2014.

Other Stocks to Consider

OFG Bancorp currently has a market capitalization of $691.3 million. Some better-ranked stocks in the Banks-Northeast industry include Shore Bancshares, Inc. (SHBI), Community Bank System Inc. (CBU) and Fulton Financial Corporation (FULT). While Shore Bancshares holds a Zacks Rank #1 (Strong Buy), both Community Bank and Fulton Financial carry a Zacks Rank #2 (Buy).