Ticonderoga maintains a 'Neutral' on Piper Jaffray (PJC); Muni Issuance Trends Improving
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Price: $79.62 --0%
Rating Summary:
1 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
1 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Ticonderoga maintains a 'Neutral' on Piper Jaffray (NYSE: PJC).
Ticonderoga analyst said, "Shares Are Likely Pricing in Very Depressed Issuance Levels: PJC had a challenging quarter for muni underwriting in Q1’11 stemming from the worst quarter for municipal bond issuance since 2003. Signs that this market may be improving should prove positive for shares, which are down 26% this quarter and now trade at 11.5x our forward four-quarter EPS estimate, a 9% discount to the peer group (historical median is 17.4x). While one week does not make a trend and state B/S are still a work in progress, the improvement is encouraging, as we are currently modeling fairly depressed levels of muni issuance throughout this year. The discounted multiple vs. peers suggests that shares are pricing in very depressed levels as well."
"Muni Trading Has Also Likely Been Solid. We also note that muni trading, which is roughly 60% of PJC fixed income trading, has likely been strong so far in Q2; note that it is likely driven by prop trading similar to Q1’11. Lack of new issuance/supply has steadily driven down yields as fund flows/demand has improved; we suspect that PJC continued to take advantage of these opportunities."
For more ratings news on Piper Jaffray click here and for the rating history of Piper Jaffray click here.
Shares of Piper Jaffray closed at $30.57 yesterday.
Ticonderoga analyst said, "Shares Are Likely Pricing in Very Depressed Issuance Levels: PJC had a challenging quarter for muni underwriting in Q1’11 stemming from the worst quarter for municipal bond issuance since 2003. Signs that this market may be improving should prove positive for shares, which are down 26% this quarter and now trade at 11.5x our forward four-quarter EPS estimate, a 9% discount to the peer group (historical median is 17.4x). While one week does not make a trend and state B/S are still a work in progress, the improvement is encouraging, as we are currently modeling fairly depressed levels of muni issuance throughout this year. The discounted multiple vs. peers suggests that shares are pricing in very depressed levels as well."
"Muni Trading Has Also Likely Been Solid. We also note that muni trading, which is roughly 60% of PJC fixed income trading, has likely been strong so far in Q2; note that it is likely driven by prop trading similar to Q1’11. Lack of new issuance/supply has steadily driven down yields as fund flows/demand has improved; we suspect that PJC continued to take advantage of these opportunities."
For more ratings news on Piper Jaffray click here and for the rating history of Piper Jaffray click here.
Shares of Piper Jaffray closed at $30.57 yesterday.
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