Raymond James Outlines BOK Financial Upside

BOK Financial Corporation BOKF has recently demonstrated an upside in efficiency targets, according to one firm.

The Analyst

Raymond James analysts led by Michael Rose upgraded BOK from Market Perform to Outperform, with a price target of $110.

The Thesis

Rose’s new valuation follows an investor meeting with Chief Credit Officer Marc Maun and Director of Investor Relations Joe Crivelli. According to Rose, the meeting reflected several key points.

• An increased confidence in the company’s ability to exceed cost saving strategies, after its acquisition of CoBiz financial.
• Upside potential to the loan growth outlook for 2018.
• The above-peer loan loss reserve, mixed with improving energy prices and well-positioned retail and healthcare portfolios.
• High concentration of lower-cost deposits, as well as a lowered loan and deposit ratio.
• “The relative under-performance of BOKF shares since the CoBiz deal was announced. In turn, we now view risk-reward positively where its above-peer growth prospects, revenue and market diversity, lower than peer deposit beta, benign credit trends, and improving profitability warrant a modest premium vs. peers and less of a discount versus what we see as its closest peer in CFR,” Rose said in a note.
• The meeting focused on loan growth, efficiency ratios, asset sensitivity and cost savings expectations, according to Rose.

Price Action

BOK Financial shares were down marginally at $98.06 at time of publication Wednesday.

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