Morgan Stanley Initiates BKU At EW, $31 PT

Morgan Stanley has initiated coverage of BankUnited, Inc. BKU at Equal-weight with a $31 PT.

“We like BKU's focus on acquisitions in the fragmented and distressed Florida market,” Morgan Stanley writes. “However, we think the market has priced in more than half of the expected benefit from using excess capital for acquisitions. We see limited upside of
8% to our $31 price target.

“Risk/reward looks balanced, with 29% upside in our bull case (highly accretive capital deployment) and 30% downside in our bear case (no acquisitions in the next 12 months).”

BankUnited currently trades at $28.59.