Jefferies Downgrades Renasant Corp (RNST) to Hold
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Jefferies downgraded Renasant Corp (NASDAQ: RNST) from Buy to Hold with a price target of $41.00 (from $39.00) to reflect post-election stock/EPS dynamics.
Analyst Ken Usdin commented, "We move RNST to Hold (from Buy) after a good catch-up move that puts the company at a reasonable valuation. Pre-election, the stock had traded at a 1.5x discount to the smidcap group avg., but after a 24% post-election gain (vs. 18% for the KRE), the gap has narrowed to under 1x. Further upside could be inhibited by a bottom-quartile asset-sensitivity profile, which is largely driven by a relative small C&I book (only 12% of loans), the lowest in our coverage universe. Additionally, the onset of higher rates could pressure mortgage banking fees (39% of fees YTD), despite the business not being overly weighted towards refi originations (38% in 3Q). Our price target of $41 implies 15.5x our '18 EPS estimate or 90% of the current '17 S&P 500 P/E multiple. Upside risks to our downgrade: RNST proves more rate-sensitive than expected and conducts more highly accretive acquisitions."
Shares of Renasant Corp closed at $41.18 yesterday.
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Related EntitiesJefferies & Co, Standard & Poor's
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