Gabelli Identifies Potential Eagle Bancorp Acquirers, Says Stock Pullback An Overreaction

Eagle Bancorp, Inc. EGBN, a bank focused on lending to commercial real estate and commercial and industrial borrowers, earned a bullish review from Gabelli Securities.

The Analyst

Analyst Steve Comery initiated coverage of Eagle Bancorp with a Buy rating and 2019 present market value estimate of $74 per share.

The Thesis

Since 2011, Eagle Bancorp's balance sheet has generated "superior marginal returns," and the company has reported in-line or superior peer credit metrics in terms of net charge-offs and non-performing loans, Comery said in the Monday initiation note. (See the analyst's track record here.) 

Eagle's core competencies in commercial lending and non-interest deposits gathering have historically protected margins and could serve as a sustainable competitive advantage, the analyst said. 

Comery attributes Eagle's recent stock price weakness to concerns about deposit pricing and loan growth. The pullback is an overreaction when weighed against the company's "proven margin maintenance and loan growth," he said. 

Gabelli highlighted potential acquirers for Eagle Bancorp's business, including F.N.B. Corp FNB, United Bankshares, Inc. UBSI and Union Bankshares Corp UBSH.

The Price Action

Eagle Bancorp shares have lost about 6.2 percent year-to-date. The stock was up 0.28 percent at $54.45 at the time of publication Monday. 

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