Compass Point Starts Kearny Financial (KRNY) at Buy

March 13, 2014 6:14 AM EDT Send to a Friend
Get Alerts KRNY Hot Sheet
Price: $13.28 +0.15%

Rating Summary:
    1 Buy, 1 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 15 | Down: 38 | New: 13
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Compass Point initiates coverage on Kearny Financial (NASDAQ: KRNY) with a Buy rating and a price target of $19.00.

Analyst Laurie Havener Hunsicker said, "KRNY offers investors a unique opportunity to invest in a well-capitalized, 130+ year old, $3.3 billion-asset sized, NYC-MSA-based bank, at a discount to fully-converted tangible book value. The key to the investment thesis sits in understanding the MHC (Mutual Holding Company) structure and the potential implications for existing shareholders in the event of a second-step IPO. Further, we believe that investors have meaningful downside protection as the discounted valuation offers a very compelling buyback opportunity for KRNY should the shares languish at this level for an extended period of time; given management’s track record of execution, we would expect them to continue to capitalize on this opportunity. We base our valuation on a blended five-pronged approach: 1) Franchise footprint (including acquisition track record and sensitivity to TB dilution); 2) Current pricing relative to peers (with added emphasis on the P/TB metric for the over-capitalized banks); 3) Credit; 4) Capital (including use of capital management tools); and 5) Management expertise (including inside ownership)."

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

Shares of Kearny Financial closed at $14.54 yesterday.

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