Nomura Securities Upgrades CIT Group (CIT) to Buy, Attractive Risk/Reward

Nomura Securities upgraded CIT Group (NYSE: CIT) from Neutral to Buy with a price target of $39.00 (from $42.50).

"We're upgrading CIT Group to Buy from Neutral to reflect our view that the risk/reward to owning shares (currently trading at a 17% discount to our 2013 TBVPS estimate and 6% discount to current TBVPS) is now favorable," analyst Bill Carcache comments. "Potential catalysts include: (1) Fed authorization to return a modest amount of capital to shareholders (CIT has ~$2.1bn in excess capital, representing ~29% of its market cap) and (2) the potential for an upside earnings surprise driven by greater-than-expected expense cuts. CIT is “under-earning” its long-term potential due to a still-expensive funding base. We would not be surprised to see CIT acquired by a large bank."

FY12E EPS goes up from ($3.2) to ($3.44); FY13E EPS from $3.39 to $3.45.

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 $36.12 yesterday.

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