Compass Point Reiterates a 'Buy' on Regions Financial (RF); Updating Numbers

May 11, 2012 7:16 AM EDT
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Price: $14.14 -3.68%

Rating Summary:
    13 Buy, 20 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 35 | Down: 30 | New: 8
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Compass Point reiterates a 'Buy' on Regions Financial (NYSE: RF) price target lowered to $7.25.

Analyst, Mike Turner, said, "As we look into FY12/FY13, RF's earnings will benefit from several material tailwinds. Namely, reduced operating expenses from lower credit-related costs and improving net interest income from CD repricing and increased securities balances. Further, provision expense should materially decline as credit quality should continue to improve. Near-term, loan growth and lower new origination yields remain the primary headwinds. Additionally, given the improved credit outlook and recent capital raise, we estimate RF will end FY13 with a Tier 1 common in excess of 11%, implying nearly $1.06 per share in excess capital. Admittedly, the excess capital will be for buybacks for the next year, though we believe it provides evidence that RF has turned the corner and should provide some downside protection in the stock."

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

Shares of Regions Financial closed at $6.67 yesterday.

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