UPDATE: J.P. Morgan Lowering Price Target On City National Corp (CYN)
J.P. Morgan Chase & Co. is lowering its price target on shares of City National Corp (NYSE: CYN) to $66 from $68, but it is keeping its Overweight rating following earnings.
In a note to clients, J.P. Morgan writes, "CYN reported 1Q11 EPS of $0.74, or $0.71 excluding the impact of securities gains, which was in line with our and the consensus estimate. Excluding the impact of largely offsetting items related to FDIC related deals, operating trends were generally in line, with two exceptions - credit improvement was more pronounced than expected, however, loan contraction was reported to be higher than expected. As the market increases its focus on loan growth prospects, it may not like what it found in CYN's first quarter earnings release. On top of average loans running off at a 4.1% annualized pace (excluding covered loans), similar to the decline posted by peer banks thus far, period-end loans at CYN also declined at a 4% annualized pace. Layer on to this a slightly more cautious tone from management on the conference call and the loan growth bar likely just got reset lower at CYN, which is likely to put some pressure on the stock (note: CYN reported 1Q11 results after the close on Thursday, April 21st). We are going to take the other side of this likely pressure and recommend investors use potential weakness in CYN shares as a buying opportunity."
Shares of CYN are down 43 cents today to trade at $55.68, a loss of 0.77%.
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