Compass Point Downgrades Capital Bank Financial (CBF) to Neutral

October 21, 2013 6:41 AM EDT Send to a Friend
Get Alerts CBF Hot Sheet
Price: $25.85 +2.66%

Rating Summary:
    5 Buy, 4 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 18 | Down: 28 | New: 36
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Compass Point downgraded Capital Bank Financial (NASDAQ: CBF) from Buy to Neutral with a price target of $24.00 (from $22.00) following Q2 results.

Analyst Evan Hutto comments, "Following the release of 3Q13 earnings, we downgrade our rating from Buy to Neutral as we see limited upside to shares at current levels. Since our 2/8/13 initiation, shares have appreciated roughly 37% compared to the BKX return of 19%. Though management has been working diligently to grow the loan book and find acquisitions, the biggest question surrounding CBF remains when will the company be able to efficiently deploy its ~$300M in excess capital. Given the recent flurry of M&A activity and several regionals looking to expand in the Southeast, CBF is likely facing heightened competition within its target footprint. That being said, management continues to make progress on reducing legacy expenses and improving the overall credit profile of the bank. While we maintain a positive bias on CBF, the stock appears fairly valued on a fundamental basis. We believe the stock would ultimately garner a higher multiple if it were to successfully deploy its capital into an accretive acquisition and/or generate outsized loan growth. Thus, at 17.8x our FY14E EPS, we would look for a lower entry point rather than selling shares at the current price."

For an analyst ratings summary and ratings history on Capital Bank Financial click here. For more ratings news on Capital Bank Financial click here.

Shares of Capital Bank Financial closed at $22.58 yesterday.


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