Credit Suisse Reinstates E*TRADE (ETFC) at Outperform
- Apple (AAPL) Tops Q4 EPS by 2c; Issues Solid Outlook
- Wall Street slips on earnings; Apple falls late after results
- Chipotle Mexican Grill (CMG) Posts Q3 EPS of $0.27; Comps Miss Views; Additional Stock Buyback Approved
- Pandora (P) Misses Q3 EPS by 1c, Q4 Revenue Guidance Falls Short
- After-Hours Movers 10/25: (OGXI) (AKAM) (VRTX) Higher; (EW) (NUVA) (CMG) (AAPL) Lower (more...)
Get instant alerts when news breaks on your stocks. Claim your 2-week free trial to StreetInsider Premium here.
Credit Suisse reinstates coverage on E*TRADE (NASDAQ: ETFC) with a Outperform rating and a price target of $33.00 (from $30.00), saying shareholders will be best served by making the right strategic acquisition versus being acquired itself.
Analyst Christian Bolu commented, "The E*Trade story is at another critical inflexion point–-the lack of core business growth resulted in the ouster of the CEO last week; the new management team has effectively been set an implicit target of 2-3% incremental business growth or "we’ll consider that this company is better in other people’s hand in terms of shareholder value". We take a closer look at three strategic options for the company–1) drive growth organically 2) drive growth via a scale or capabilities acquisition and 3) sell the company. We conclude shareholder value is best served by driving growth via the right strategic acquisition."
Further the analyst said a takeout by TD Ameritrade/Charles Schwab is feasible but not without challenges. "The lack of a robust strategic rationale for TD Ameritrade/Charles Schwab to take-out E*Trade coupled with significant revenue dis-synergies (mainly from loss of high margin net interest income) means that a financially rationale takeout price for E*Trade would offer little to no premium to current prices–-a scenario we doubt would be acceptable to E*trade shareholders," the analyst commented. "We define financially rationale as a deal where ROIC is above the buyers cost of capital."
The firm is raising 2018 estimate to $1.90 (from $1.80) to account for the OptionsHouse acquisition.
Shares of E*TRADE closed at $28.19 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Needham & Company Raises Price Target on II-VI, Inc. (IIVI) Following 1Q Beat
- Visa (V) PT Raised to $97 at UBS on Solid Q4
- Jefferies Raises Price Target on Rambus (RMBS) Following 3Q Report
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, New Coverage
Related EntitiesCredit Suisse, Definitive Agreement
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!