UBS Maintains a 'Neutral' on Regions Financial (RF); Exiting TARP on a Breakeven Basis?

UBS maintains a 'Neutral' on Regions Financial (NYSE: RF) price target raised from $4.00 to $5.50.

UBS analyst says, "We believe RF may announce TARP repayment following the Fed’s capital review in March. In addition to Morgan Keegan proceeds, we expect RF will issue both debt and common to fund repayment. Using 9.5% Tier 1 Common as the benchmark, we estimate RF would issue $825 mln in common to repay the $3.5 bln in TARP. Using a discounted $4.75 sh. price, we estimate issuance could be ~14% dilutive to share count, but all-in including debt costs, RF could exit TARP on breakeven EPS basis."

For an analyst ratings summary and ratings history on Regions Financial click here. For more ratings news on Regions Financial click here.

Shares of Regions Financial closed at $5.17 yesterday.

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