FBR Research Reiterates a 'Market Perform' on SVB Financial (SIVB); Raises PT & Estimates

February 10, 2010 7:57 AM EST

FBR Research reiterates a Market Perform rating on SVB Financial (Nasdaq: SIVB), raising our price target from $39 to $42.

FBR analyst says, "Upgrades stock, raise PT and raising our FY10 core EPS estimate to $1.75, from $1.55, and establishing our FY11 core EPS estimate of $2.35. Our higher estimates primarily reflect higher net interest income and lower provision expense. Additionally, we are raising our normalized earnings expectations to a range of $3.75-$4.25, from a range of $3.25-$3.75, primarily reflecting higher net interest income. We continue to view the franchise as attractive and expect that, due to the strong capital position and high degree of asset sensitivity at the bank, shares will likely demonstrate stronger downside support over the next year, with some measure of upside-making for an increasingly attractive risk/reward scenario at the current valuation. However, we continue to believe that the longer-term growth opportunities will not be as robust as those enjoyed by the franchise pre-cycle; and, hence, we expect normalized trading multiples to likely prove more conservative, versus historical levels, making the overall expected share price returns over the next few years healthy but not as compelling as those of some of the cheaper regional banks trading closer to TBV/share. As such, we continue to await a better entry point into the shares, and we could become more constructive on a pullback."

To see all the upgrades/downgrades on shares of SIVB, visit our Analyst Ratings page.

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