FBR Capital Upgrades Regions Financial (RF) to Outperform

FBR Capital upgraded Regions Financial (NYSE: RF) from Market Perform to Outperform with a price target of $10.50 (from $10.00) amid improving operating leverage.

Analyst Paul Miller, Jr. commented, "On April 15, Regions Financial reported 1Q16 EPS of $0.20, meeting our estimate and beating the consensus estimate of $0.18. In conjunction with the earnings release, management essentially reiterated its 2016 guidance but did mention that some results may come in at the low end of the range, given continued weakness in the energy markets and low interest rates. Regions appears to be making good headway with its expense management initiatives, with adjusted operating expenses now declining sequentially for three quarters in a row, and management highlighting an additional ~$120 million in expenses to be taken out in FY16 and even more in FY17. While elevated provisions will likely remain a headwind to growth through FY16, we believe that RF shares are too attractively valued to pass up, especially as the company continues to grow revenues and improve its operating leverage. Accordingly, we are upgrading RF shares to Outperform from a Market Perform rating and increasing our price target to $10.50 from $10.00. We are maintaining our FY16 EPS estimate of $0.85 and our FY17 EPS estimate of $0.95."

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 $8.76 yesterday.

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