Market Overview

4 Reasons Why This Analyst Turned Bullish On Fulton Financial

4 Reasons Why This Analyst Turned Bullish On Fulton Financial
Related FULT
A Preview Of Fulton Financial's Q3 Earnings
Earnings Scheduled For October 16, 2018

Fulton Financial Corp (NASDAQ: FULT) recently reported strong second-quarter results thanks to better-than-expected net interest margin expansion and credit results.

The Analyst

Piper Jaffray analyst Matthew Breese upgraded Fulton Financial from Neutral to Overweight and increased the price target from $18.50 to $19.

The Thesis

Lancaster, Pennsylvania-based Fulton Financial, which is one of the more commercial- and industrial-leaning and better-funded institutions in its region, will likely see continued margin expansion despite the flat curve, Breese said in a Thursday note. (See the analyst's track record here.) 

The analyst said he expects the margin expansion to continue over the next 12-18 months.

"Specifically, for 2018-2019, we expect the NIM to equal 3.4 percent and 3.49 percent, including a rate hike in September and December of this year." 

Loan growth expectations look reasonable, especially after a reset to low-to-mid single-digit growth, Breese said. 

The analyst projects regulatory relief; Fulton has has four pending regulatory orders that the analyst expects to be resolved over the next six to 12 months.

Following the resolution of regulatory issues, Breese sees scope for modest cost savings and a strategic shift to M&A and branch openings.

"Fulton is on the cusp of being able to more aggressively go on the offensive," the analyst said. 

Fulton's valuation looks attractive, as the stock trades at 12 times estimated 2019 earnings versus 14 times for peers with similar profitability, according to Piper Jaffray. 

The profitability outlook for Fulton calls for a return on assets of 1.1-1.2 percent and a return on capital employed of 12.5-13.5 percent, Breese said. 

The Price Action

Fulton shares were up 3.54 percent at $17.55 at the close Thursday. 

Related Links:

Bank Of Montreal Will Outperform Peers, RBC Capital Markets Says In Upgrade

Banks And Credit Unions Working With Cannabis Business In The U.S.

Latest Ratings for FULT

Oct 2018BarclaysUpgradesUnderweightOverweight
Jul 2018PiperJaffrayUpgradesNeutralOverweight
Apr 2018BarclaysMaintainsUnderweightUnderweight

View More Analyst Ratings for FULT
View the Latest Analyst Ratings

Posted-In: bank stocks banks Matthew Breese Piper JaffrayAnalyst Color Upgrades Price Target Analyst Ratings


Related Articles (FULT)

View Comments and Join the Discussion!

Latest Ratings

ALRMImperial CapitalUpgrades58.0
ANDXSunTrust Robinson HumphreyDowngrades41.0
CSLLongbow ResearchUpgrades122.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

M1 Finance Has A New Feature That Lets You Borrow Against Your Portfolio

Some Perspective On Netflix's Subscriber Figures