UPDATE: ISI Group Upgrades E*TRADE Financial to Neutral on 1Q EPS

In a report published Friday, ISI Group analyst Brian Bedell upgraded the rating on E*TRADE Financial Corporation (NASDAQ: ETFC) from Cautious to Neutral, and reiterated the $10.00 price target.In the report, Bedell noted, “ETFC's 1Q EPS of $0.12 met our estimate and Consensus: Overall, the results were encouraging and indicate good fundamental progress, though some headwinds remain that should make 2013 & 2014 Consensus still difficult to achieve. Key positives were better credit quality and lower provisions, lower securities gains (i.e. better earnings quality), reasonably good customer metrics & brokerage revenue, and good core expense control, while bank capital ratios continue to build with the bank leverage ratio up to 9.3% from 8.7% in 4Q. Negatives are greater NIM pressure than forecast, lower market making revenue, and our prior expense forecast for balance of 2013 was too low.”E*TRADE Financial Corporation closed on Thursday at $9.54.