Nomura Securities Maintains a 'Neutral' on CIT Group (CIT); Meeting With Management

Nomura Securities maintains a 'Neutral' on CIT Group (NYSE: CIT) price target of $38.00.

Analyst, Bill Carcache, said, "We met with John Thain (Chairman and CEO), Scott Parker (CFO) and Nelson Chai (President) to discuss business trends. While the timing is uncertain, we believe CIT is on a clear path to attaining an investment grade rating. In our view, higher ratings would increase the universe of investors who can own CIT bonds, accelerate the speed at which CIT can replace existing funding with lower cost debt, and ultimately juice the rate of improvement in the company’s economic margins. Once CIT’s Series A debt is fully repaid, the company’s balance sheet will be unencumbered and CIT will be able to use its assets as collateral to obtain lower cost securitization-based funding (3-4% range). While our rating remains Neutral, we would not be surprised to see shares edge closer to our estimate of 4Q12 TBVPS ($44.33) on the expectation of future rating increases, suggesting possible upside of ~10%."

For an analyst ratings summary and ratings history on CIT Group click here. For more ratings news on CIT Group click here.

Shares of CIT Group closed at $40.35 yesterday.

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