Compass Point Downgrades Independent Bank (INDB) to Neutral

Compass Point downgraded Independent Bank (NASDAQ: INDB) from Buy to Neutral with a price target of $44.00 (from $45.00) citing valuation despite solid Q1 results.

Analyst Laurie Havener Hunsicker commented, "We reduce our Operating FY15E from $2.71 to $2.65 and FY16E from $2.90 to $2.83. Accordingly, we adjust our price target (PT) from $45 to $44; further, due to the recent stock rally since INDB last reported earnings on 1/22/2015 (INDB +11%, versus NASDAQ Bank Index +7%), and with the stock sitting at our PT, we downgrade from Buy to Neutral. We see INDB earning $2.65 without the benefit of higher rates and our longer term outlook remains in tact. While the market has seemingly lost focused on asset sensitivity, we note that INDB is a standout community bank in this category, as well as overall. When the asset-sensitivity buy trade eventually emerges, we believe that the valuation multiple of INDB will begin to expand. Our $44 PT is based on the perception that rates will rise and that INDB shares will appreciate well in advance of the actual EPS ramp occurring; we note, however, that our EPS estimates through 2016 do not yet assume a rate move. INDB is the largest publicly-traded bank headquartered in MA serving the greater Boston MSA."

For an analyst ratings summary and ratings history on Independent Bank click here. For more ratings news on Independent Bank click here.

Shares of Independent Bank closed at $44.36 yesterday.

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