FBR Capital Upgrades M&T Bank (MTB) to Market Perform
MTB Hot Sheet
Rating Summary:5 Buy, 7 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 1
FBR Capital upgrades M&T Bank (NYSE: MTB) from Underperform to Market Perform, price target to $70
FBR analyst says, "We upgrade MTB to Market Perform based on (1) an improved earnings outlook, (2) credit trends tracking better than modeled, and (3) improvement in MTB's TCE ratio and our expectation for continued improvement. We acknowledge that we overestimated MTB's credit losses, and given our revised loss outlook, we expect MTB will be able to generate a 15% ROTCE in 2010 and a 17% to 18% ROTCE in 2011. At this level of profitability, MTB has historically traded at 2.4x to 2.8x tangible book multiple. We raise our respective 2009 and 2010 EPS estimates to $3.10 (from $2.55) and $4.10 (from $2.75) largely reflecting lower credit costs, and we initiate a 2011 estimate of $5.00. We still consider MTB's late-cycle loan exposures (two-thirds of loans in CRE and C&I categories), uncertainty surrounding the shares owned by AIB, relatively thin capital (although improved), and premium valuation relative to peers as risks."
M&T Bank Corporation operates as the holding company for M&T Bank and M&T Bank, National Association that provide commercial and retail banking services to individuals, corporations and other businesses, and institutions.
FBR analyst says, "We upgrade MTB to Market Perform based on (1) an improved earnings outlook, (2) credit trends tracking better than modeled, and (3) improvement in MTB's TCE ratio and our expectation for continued improvement. We acknowledge that we overestimated MTB's credit losses, and given our revised loss outlook, we expect MTB will be able to generate a 15% ROTCE in 2010 and a 17% to 18% ROTCE in 2011. At this level of profitability, MTB has historically traded at 2.4x to 2.8x tangible book multiple. We raise our respective 2009 and 2010 EPS estimates to $3.10 (from $2.55) and $4.10 (from $2.75) largely reflecting lower credit costs, and we initiate a 2011 estimate of $5.00. We still consider MTB's late-cycle loan exposures (two-thirds of loans in CRE and C&I categories), uncertainty surrounding the shares owned by AIB, relatively thin capital (although improved), and premium valuation relative to peers as risks."
M&T Bank Corporation operates as the holding company for M&T Bank and M&T Bank, National Association that provide commercial and retail banking services to individuals, corporations and other businesses, and institutions.
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