UPDATE: D.A. Davidson Initiates Wintrust Financial at Neutral on Strong Balance Sheet

In a report published Friday, D.A. Davidson analyst Stephen Geyen initiated coverage on Wintrust Financial WTFC with a Neutral rating and $39.00 price target.

In the report, D.A. Davidson noted, “We are initiating coverage of Wintrust Financial with a NEUTRAL rating and a price target of $39. WTFC shares trade mostly in line with the D.A. Davidson Mid-cap median of 14.5x. We view Wintrust Financial as one of Chicago's best positioned banks to take advantage of M&A in the Chicago market over the next several years. Furthermore, management has shown an uncanny ability to string together acquisitions that are accretive to shareholders. While we have been impressed by the bank's growth over the last few years, we believe the stock's multiple largely accounts for the achievement. Over the last three years loans have grown at a CAGR of 13.8% driven through acquisitions and organic growth. We estimate the CAGR of the bank's organic loan growth has been in the 8%-9% range. Since 2009, Wintrust has acquired $3.3 billion (not discounted) in assets through 14 separate bank and branch acquisitions. Organic growth can be attributed in part to the hiring of two very experienced middle market commercial bankers and their supporting team in 2010.”

Wintrust Financial closed on Thursday at $37.41.