Nomura Securities Maintains a 'Buy' Regions Financial (RF); Cash Is King
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Price: $9.11 +1.56%
Rating Summary:
16 Buy, 7 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 12 | New: 30
Rating Summary:
16 Buy, 7 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 12 | New: 30
Trade RF Now!
Nomura Securities maintains a 'Buy' Regions Financial (NYSE: RF) price target of $6.50.
Nomura analyst, Brian Foran, said, "Press reports, including the Wall Street Journal, assert in unconfirmed reports that Regions may sell Morgan Keegan for ~$1bn plus a $250mn dividend. After a six-month auction, including speculation as recently as last week that a key bidder dropped out, we think a sale at that price would be positive. At that price RF would probably get a small increase in tangible book and capital, a modest non-cash charge to write down goodwill, and lose ~6% of pre-provision earnings. A Morgan Keegan sale, as reported in the press, would add ~$1.25bn of new cash to RF’s hold cos. This would bring total cash at the holding company to just under $4bn. Thus cash at the holding company is the real benefit of a sale; this is the least dilutive way to get cash needed for an eventual TARP repay. If Morgan Keegan is not sold, RF would probably have to wait until 2013 to repay."
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 $4.41 yesterday, with a 52 week range of $2.82-$8.09.
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Nomura analyst, Brian Foran, said, "Press reports, including the Wall Street Journal, assert in unconfirmed reports that Regions may sell Morgan Keegan for ~$1bn plus a $250mn dividend. After a six-month auction, including speculation as recently as last week that a key bidder dropped out, we think a sale at that price would be positive. At that price RF would probably get a small increase in tangible book and capital, a modest non-cash charge to write down goodwill, and lose ~6% of pre-provision earnings. A Morgan Keegan sale, as reported in the press, would add ~$1.25bn of new cash to RF’s hold cos. This would bring total cash at the holding company to just under $4bn. Thus cash at the holding company is the real benefit of a sale; this is the least dilutive way to get cash needed for an eventual TARP repay. If Morgan Keegan is not sold, RF would probably have to wait until 2013 to repay."
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 $4.41 yesterday, with a 52 week range of $2.82-$8.09.
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Nomura, Morgan Keegan & Company, Dividend, Earnings
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