UPDATE: ISI Group Initiates Coverage on TCF Financial as Regulatory Concerns Limit Multiple Expansion

In a report published Tuesday, ISI Group analyst Keith Murray initiated coverage on

with a Neutral rating and $15.50 price target. In the report, ISI Group noted, “We are initiating coverage of TCF with a Neutral rating and 12-month price target of $15.50. TCF continues to broaden its lending footprint and has a fairly balanced loan mix (50/50 commercial/consumer). On a positive note, credit trends continue to improve and TCF is actively selling distressed assets, a trend that we think will continue. On the flip side, we think TCF's expense ratios could remain above targets in the near term as the firm needs to scale up in areas like auto and is also investing in retail product enhancements (mobile apps etc.). The stock is not expensive on a PE basis (11x our 2015E) but we see modest upside as concerns around CFPB rules and interchange could limit multiple expansion.” TCF Financial Corporation closed on Monday at $14.49.