FBR Capital Reiterates 'Top Pick' on Popular (BPOP); Transformation Continues; Material Upside Expected
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Price: $176.91 -0.54%
Rating Summary:
15 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
15 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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FBR Capital reiterates an 'Outperform/Top Pick' on Popular, Inc. (NASDAQ: BPOP), PT $4.50.
FBR analyst says, "After reviewing Popular's recent 10-K filing, and given recent stock price weakness, we are reiterating Popular as our Top Pick and maintaining an OP rating. Additionally, we are adjusting our core 2011-12 EPS estimates to $0.07 and $0.41, from $0.30 and $0.48. Our estimate reductions largely stem from the $100 million DTA write-down expected in 1Q11, a slightly higher 2011 operating expense base than previously modeled, and a lower expected reserve bleed. Our earlier thinking had the company releasing excess reserves through 2012 while managing down problem loan balances in measured fashion. With Popular's recent announcement of an accelerated troubled-asset workout, we now expect 2012 to yield net income in line with the company's core earnings power."
"Despite the reduction in our estimates, there were several positives in the quarter that, we believe, are key to driving a higher future valuation for BPOP: the clearer outlook on profitability, the rapid approach of normalized returns due to accelerated credit improvement, and the continued inexpensive valuation."
For more ratings news on Popular, Inc. click here and for the rating history of Popular, Inc. click here.
Shares of Popular, Inc. closed at $2.97 yesterday.
FBR analyst says, "After reviewing Popular's recent 10-K filing, and given recent stock price weakness, we are reiterating Popular as our Top Pick and maintaining an OP rating. Additionally, we are adjusting our core 2011-12 EPS estimates to $0.07 and $0.41, from $0.30 and $0.48. Our estimate reductions largely stem from the $100 million DTA write-down expected in 1Q11, a slightly higher 2011 operating expense base than previously modeled, and a lower expected reserve bleed. Our earlier thinking had the company releasing excess reserves through 2012 while managing down problem loan balances in measured fashion. With Popular's recent announcement of an accelerated troubled-asset workout, we now expect 2012 to yield net income in line with the company's core earnings power."
"Despite the reduction in our estimates, there were several positives in the quarter that, we believe, are key to driving a higher future valuation for BPOP: the clearer outlook on profitability, the rapid approach of normalized returns due to accelerated credit improvement, and the continued inexpensive valuation."
For more ratings news on Popular, Inc. click here and for the rating history of Popular, Inc. click here.
Shares of Popular, Inc. closed at $2.97 yesterday.
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