Piper Jaffray Downgrades Valley National Bancorp (VLY) to Neutral

Piper Jaffray downgraded Valley National Bancorp (NYSE: VLY) from Overweight to Neutral with a price target of $9.50 (from $10.00) following "underwhelming" Q2 results.

Analyst Matthew Breese commented, "This was a disappointing quarter for VLY as margin expansion was less than expected (+6bp to 3.14% vs. our 3.18% est.), expenses were elevated (2Q operating expenses equaled $119.1 vs. our $116.2 million estimate), and bottom line earnings were a penny light at $0.15 p/s compared to our estimates. Loan growth was a bright spot, with balances increasing 2.3% and fee income was stronger than anticipated driven by higher mortgage banking revenue. Overall, the company generated a 0.68% ROA, in-line with the past six quarters, and tangible book value increased to $5.44 p/s, up from $5.40 p/s in the first quarter. With continued margin pressure, we lowered EPS estimates, reduced our price target to $9.50 p/s and lowered our rating to Neutral from Overweight. Our new P/T equates to 14x our 2017 estimates, a multiple in-line with Northeast peers at 14x."

For an analyst ratings summary and ratings history on Valley National Bancorp click here. For more ratings news on Valley National Bancorp click here.

Shares of Valley National Bancorp closed at $9.40 yesterday.

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