Wedbush Reiterates Underperform Rating on New York Community Bancorp (NYCB)

Wedbush analyst David J. Chiaverini reiterated an Underperform rating and $3.00 price target on New York Community Bancorp (NYSE: NYCB).

The analyst said: "We're updating our model as we're now assuming NYCB's new preferred equity shares convert into common shares sooner than we originally anticipated given the company noted on its conference call last week that the preferreds should convert to common within six months of issuance. Therefore, we're eliminating the associated preferred dividends from our model (quarterly dividend of $8 million per quarter instead of $38 million per quarter). We're also updating our reserve build assumptions for 1Q (to $600 million from $300 million) as the company noted on its conference call that the main purpose of the capital raise is to address its below-average ACL coverage ratio, which we believe implies a large provision may occur in 1Q following its recent equity raise. Estimate changes and recommendation. We're lowering our 2024 estimate to - $0.26 from -$0.15 due to higher provision assumptions and increasing our 2025 estimate to $0.30 from $0.20 owing to the elimination of preferred dividends related to the recent preferred equity issuance given we expect the preferreds to convert to common within six months of issuance, in-line with the company's commentary on its recent call. We maintain our Underperform rating, and our price target of $3.00 is based on 10x our 2025 EPS and represents 55% of pro forma 1Q TBV of $5.50. Our UNDERPERFORM rating is based on NYCB's high exposure to NYC rent-regulated multifamily loans, which we believe are under stress and represent 22% of NYCB's total loans"

For an analyst ratings summary and ratings history on New York Community Bancorp click here. For more ratings news on New York Community Bancorp click here.

Shares of New York Community Bancorp closed at $3.42 yesterday.

You May Also Be Interested In

• Fiserv (FISV) PT Lowered to $60 at Freedom Broker
• SoundThinking (SSTI) PT Lowered to $8 at Cantor Fitzgerald
• Freedom Broker Upgrades Serve Robotics (SERV) to Buy