UPDATE: Nomura Downgrades E*TRADE Financial Corporation to Neutral, Reiterates $11 PT on Limited Upside

In a report published Friday, Nomura downgraded its rating on E*TRADE Financial Corporation ETFC from Buy to Neutral and reiterated its $11.00 price target. Nomura noted, “Shares of ETFC are up 20% so far this year, outpacing the broader market and its online broker peers. Unfortunately, the driver of this outperformance for the stock has been multiple expansion as earnings estimates have not moved. We think management deserves credit for lowering the company's debt burden and executing on its de-leveraging strategy, and we expect continued improvement over time as the loan book winds down. However, with the stock now trading near our $11 target price and estimates already reflecting cost improvements, we see limited upside in the stock from this point and are moving to Neutral from Buy. Approval from the Fed and OCC to dividend capital to the parent from the bank is likely the next major catalyst for ETFC, but we don't see this happening until early 2014 at a minimum.” E*TRADE Financial Corporation closed on Thursday at $10.78.