UPDATE: Stifel Nicolaus Upgrades SY Bancorp to Buy

Stifel Nicolaus raises its rating on SY Bancorp SYBT to Buy from Hold and establishes a $26 target price on shares as it transfers coverage between analysts. Stifel Nicolaus says, "We are raising our rating on the shares to Buy from Hold and establishing a $26 target price that is based on the output of our discounted earnings model that projects a future earnings stream through FY14 and a derived terminal value (employs sustainable growth rate of 4.5%) both at 11.5%. Our sustainable growth rate is conservative, in our view, given a balance sheet that is projected to turn FY12 ROE of ~12.2% on TCE/TA of ~10% by YE12 and in combination with an earnings retention rate of ~58%." SYBT closed at $23.42 a share on Tuesday.