UPDATE: Raymond James Upgrades NewBridge Bancorp to Outperform, Names $8 PT on Compelling Story at Current Levels

In a report published Thursday, Raymond James analyst William J. Wallace IV upgraded the rating on NewBridge Bancorp NBBC from Market Perform to Outperform, and named an $8.00 price target. In the report, Raymond James noted, “We are upgrading our rating on NewBridge Bancorp to Outperform from Market Perform and establishing an $8 price target. The company has undergone a transformation over the past several quarters with a concurrent capital raise and credit scrub that significantly reduced nonperforming asset (NPA) levels and improved capital levels allowing for two subsequent acquisitions that improved the EPS growth profile. As a result, the profitability picture has improved significantly, with upside potential should the bank continue to execute on its growth strategy and generate additional operating leverage. NBBC shares have underperformed this quarter, down 1.8% since September 30 compared to an 8.7% gain in the NASDAQ Bank index, despite an increase in 2015 EPS estimates following its most recent announced intended acquisition of CapStone Bank (CPSE/$15.22/Not Covered) on November 1. We estimate returns on tangible common equity (ROTCE) will increase to above 10% in 2014 and 2015, from 9.5% in 3Q13, and above the roughly 9% expectation for peers over both periods. As such, we view the risk/reward proposition as favorable at current levels compelling us to become more constructive on the stock.” NewBridge Bancorp closed on Wednesday at $6.92.