Deutsche Bank Upgrades Regions Financial (RF) to Buy
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Deutsche Bank upgrades Regions Financial (NYSE: RF) from Hold to Buy. Price target $5.
Deutsche analyst says, "Our upgrade reflects our view that the recent selloff in RF shares is overdone given our view that the drag from recent capital actions should be mostly behind us and we don't expect any meaningful negative surprises in the near term. The stock is down 21% (underperforming peers by 2300bps) in the past 7 trading days--first in anticipation of and then in reaction to a large capital raise. The stock now trades at a 35% discount to both our estimate of trough tangible book and vs peers. It also trades at a modest discount to peers on normalized EPS (at 5.4x)...While most banks have large unrealized securities losses, RF had a modest net gain at 3/31 given a higher quality mix of securities . In addition, we estimate gross securities gains totaled more than $400m-some of which we expect to be monetized in 2Q and 3Q. While this lowers run rate earnings in the near term, it should address any remaining capital shortfall (if there is any) and protects book value."
Regions Financial Corporation (Regions) is a financial holding company that operates throughout the South, Midwest and Texas.
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