Goldman Sachs Says E*TRADE (ETFC) Worth Up to $23 In a Takeover
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Price: $49.26 --0%
Rating Summary:
11 Buy, 13 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
11 Buy, 13 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Goldman Sachs commented on E*TRADE (NASDAQ: ETFC) in light of recent strategic review, promoted by its largest investor Citadel.
The firm said their sum-of-the-parts analysis implies a theoretical M&A valuation of $19-$23, and they see a 30-50% chance of a transaction.
E*TRADE could be an attractive target for peers an non-peers.
The biggest issue to a deal is the capital hole for the ETFC loan portfolio. Goldman's upper-end assumptions for loan loss reserve additions assume ETFC writes the carrying value of its loans down to 80% LTV (from an average of 108%) for an incremental $2.5 bn in credit marks, or 19% of the current carrying value.
Goldman reiterated their Buy rating and $18 price target.
For more ratings news on E*TRADE click here and for the rating history of E*TRADE click here.
Shares of E*TRADE closed at $15.50 yesterday.
The firm said their sum-of-the-parts analysis implies a theoretical M&A valuation of $19-$23, and they see a 30-50% chance of a transaction.
E*TRADE could be an attractive target for peers an non-peers.
The biggest issue to a deal is the capital hole for the ETFC loan portfolio. Goldman's upper-end assumptions for loan loss reserve additions assume ETFC writes the carrying value of its loans down to 80% LTV (from an average of 108%) for an incremental $2.5 bn in credit marks, or 19% of the current carrying value.
Goldman reiterated their Buy rating and $18 price target.
For more ratings news on E*TRADE click here and for the rating history of E*TRADE click here.
Shares of E*TRADE closed at $15.50 yesterday.
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