FBR Capital Upgrades Sterling Financial (STSA) to Outperform; Credit Improves More Than Expected
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Price: $1.10 --0%
Rating Summary:
1 Buy, 5 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
1 Buy, 5 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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FBR Capital upgraded Sterling Financial (NASDAQ: STSA) to Outperform. PT $20.
FBR analyst says, "We are upgrading the stock because the company has returned to profitability sooner than expected, primarily due to a dramatic improvement in asset quality. STSA reported 1Q11 GAAP earnings of $0.09 per share compared with the FBR estimate of ($0.24) and the Street estimate of ($0.29). The earnings beat was almost entirely driven by $0.22 of reserve releases and $0.10 of securities gains. Back out the one-time securities gains and the company had an operating loss of ($0.01). We originally downgraded STSA to Market Perform in January after the stock ran up over $21 because we believe a premium to book value was not justified, given the company had not yet returned to profitability and the true economic value of their credit restructuring was not apparent. However, 1Q11 earnings proved their credit profile turned a corner and should allow the company to tap the value of their reserves...We are raising our FY11E GAAP EPS from $0.30 to $0.50 and maintaining our FY12 estimate at $1.65."
For more ratings news on Sterling Financial click here and for the rating history of Sterling Financial click here.
Shares of Sterling Financial closed at $16.49 yesterday.
FBR analyst says, "We are upgrading the stock because the company has returned to profitability sooner than expected, primarily due to a dramatic improvement in asset quality. STSA reported 1Q11 GAAP earnings of $0.09 per share compared with the FBR estimate of ($0.24) and the Street estimate of ($0.29). The earnings beat was almost entirely driven by $0.22 of reserve releases and $0.10 of securities gains. Back out the one-time securities gains and the company had an operating loss of ($0.01). We originally downgraded STSA to Market Perform in January after the stock ran up over $21 because we believe a premium to book value was not justified, given the company had not yet returned to profitability and the true economic value of their credit restructuring was not apparent. However, 1Q11 earnings proved their credit profile turned a corner and should allow the company to tap the value of their reserves...We are raising our FY11E GAAP EPS from $0.30 to $0.50 and maintaining our FY12 estimate at $1.65."
For more ratings news on Sterling Financial click here and for the rating history of Sterling Financial click here.
Shares of Sterling Financial closed at $16.49 yesterday.
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