Sterne Agee Reiterates Buy Rating, $50 PT on CIT Group

In a report published Friday, Sterne Agee Group reiterated its Buy rating and $50.00 price target on CIT Group CIT. Sterne Agee noted, “We are adjusting our 4Q12 EPS estimate to reflect the quarter's pay down of FSA impacted debt. The real issue in 2013 is going to be return of capital (buy back or dividends). Once a quarter we go over the debt repayments reported during the period and adjust our EPS estimates accordingly. In November, in one filing, the company announced the sale of student loans at a gain, the pay down of two tranches of related debt, and the pay down of $18 million in pre bankruptcy senior debt that did not elect to participate in the original restructuring. The net impact of the above transactions, was an increase in interest expense of $85 million and $35 million gain recorded in other income.” CIT Group closed on Thursday at $38.53.