UPDATE: Seaport Global Securities Starts Berkshire Hills Bancorp (BHLB) at Buy

Seaport Global Securities analyst David Bishop initiates coverage on Berkshire Hills Bancorp (NYSE: BHLB) with a Buy rating and a price target of $30.00.

The analyst comments "We are initiating coverage of Berkshire Hills Bancorp with a Buy rating and a $30 price target and have established 2021 and 2022 EPS estimates of $1.51 (operating) and $1.39, respectively, compared to the respective consensus of $1.70 (likely includes gains which we exclude) and $1.42. We acknowledge that our rating stance requires a longer-term view in terms of the company's return to profitability and will not be for every investor type. That said, we are in the camp that new Executive Management is likely in the "Show Me" stage for some period of time given the bank's tumultuous recent history. Turnover at the CEO level as well as some historical "choppiness" in asset quality lingers over the story, in our view, though we believe is somewhat a case of the Tail Wagging the Dog (see more below) given the limited exposure to certain segments that receive, what we believe, to be outsized investor focus. A significant excess capital position that is poised to grow as the company retrenches its operating focus (smaller to get more profitable and build capital) provides material cushion to capital and TBV should credit issues re-emerge if the pandemic lingers. Expected gains from shedding of non-strategic assets and deposits are also expected to provide capital for additional share buybacks, reduce liquidity to stabilize the NIM as well as support the hiring of senior commercial lending talent in the market from competitors undergoing merger disruption. Trading a modest amount over TBV (~110%), our target price implies relative parity with the current valuation, and we see the risk-reward equation skewed more to the "reward" than risk side at this juncture. Factoring in a new director that is a top shareholder representing an interest that, in our view, could seek a change of control if fundamental improvement does not occur as enumerated under the BEST strategic plan also provides a potential future avenue for value creation to the shares (longer-term)."

For an analyst ratings summary and ratings history on Berkshire Hills Bancorp click here. For more ratings news on Berkshire Hills Bancorp click here.

Shares of Berkshire Hills Bancorp closed at $24.91 yesterday.

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