Fulton Financial Shares Downgraded To Market Perform At KBW

In a report published Thursday, Keefe, Bruyette & Woods analysts downgraded the rating on

from Outperform to Market Perform, with a price target of $13. Fulton Financial's 1Q results were ahead of the consensus estimates and the company announced a new buyback which was anticipated by the analysts. The company's performance was driven by the control on its core expenses, reduced credit costs and a new $50 million buyback. The company reaffirmed its FY2015 guidance indicating improved loan and fee income growth. The downgrade comes in the wake of exhaustion of all anticipated catalysts. "Given the next most tangible catalyst (BSA/AML resolution) is likely a 2016 event, we are stepping aside and moving our rating to Market Perform," the analysts mentioned. "At 14.6x our 2016E, the valuation gap to the KRX has been cut in half over the past year; however, full convergence may be more challenging to realize until the growth profile improves and Bank Secrecy Act/Anti-Money Laundering (BSA/AML) issues are fully resolved," the analysts added. The EPS estimates for 2015 and 2016 have been reduced from $0.88 to $0.87 and from $0.97 to $0.95, respectively, to reflect lower revenues.